Crypto Remittances: Disrupting the International Financial System
The need for a crypto-powered decentralised protocol to facilitate the transfer of monetary value across borders has never been higher. Before I get to my graphical representation of the crypto-remittance ecosystem, I want to provide context through a few pointers.
- Western Union suspends money transfers to Afghanistan at a time when it needs it the most (Remittances make up 4% of Afghanistan’s GDP)
- Legacy firms slow to add cryptocurrency optionality, despite rising demand and adoption in the emerging world
- Blockchain Technology Use Case Pie Chart —Cross Border Remittances at roughly 16%
- Crypto adoption is witnessing a meteoric rise through P2P platforms and remittances
- How Common Is Crypto?
- Financial Times Deep Dive into the Fintech Revolution disrupting Remittances
Additionally, Murtaza in his blog “A Billion Here, a Billion There: Crypto Remittances Are Suddenly Real Money” masterfully highlights the use case for cryptocurrency in cross-border remittances. To further solidify his argument, I want to share the graphical representation of the data I have curated on cryptocurrency remittances from the recent report from Chainalysis on the Crypto Adoption Index 2021.
In my analysis, I decided to group the countries ranked above by primary geographic cluster (or continent) to get a sense of where the largest cluster on-chain value was received.
Please find the graphical representation below to give a clear picture on where the on-chain value received is distributed by geographical cluster.
While I understand that the geographical clusters with the higher on-chain value received are more populated, it is clear where the cryptocurrency remittances are proving to be most helpful — the developing world. With countries like Nigeria, Vietnam, and the Philippines leading the charge against the legacy financial institutions, it is only a matter of time before crypto remittances become the default modus operandi of transferring monetary value across borders.