Transformation in Remittance Landscape through Blockchain technology

Author


LTP Research Team

Remittance has always been dominated by companies like Western Union and MoneyGram. However, the recent upsurge in popularity of blockchain technology is making these traditional players invest in this technology. Blockchain technology is trying to solve multiple issues such as high transfer cost and limited money distribution methods in the remittance landscape. Many banks, startups and traditional players are adopting blockchain technology to make the scenario competitive by offering different forms of money transfer services.

Here are a few examples of traditional players, startups, banks and IT firms leveraging blockchain technology for easy and fast money transfer services:

• Digital Currency Group, a firm that collaborates with financial institutions to develop use cases for blockchain technology, has raised undisclosed amount from Western Union in April 2016. This deal will help Western Union navigate through blockchain technology. However, Western Union is also investigating a variety of technologies, including Ripple, a company that employs distributed ledger technology for international payments.

• Recently, Royal Bank of Canada revealed that it is working on a new proof-of-concept for distributed ledger-based remittance using Ripple’s platform. Similarly, remittance player ZipZap has leveraged Ripple’s platform to power blockchain technology.

• KB Kookmin Bank, one of the largest commercial banks in South Korea, has entered a MoU with Coinplug which focuses on developing a new foreign-exchange business model based on blockchain.

• Similarly, many IT firms are developing enterprise blockchain solutions to garner the financial industry. Recently, Microsoft has struck a deal with a group of leading banks to help develop blockchain-like technology which can be utilized in areas from remittances to securities exchanges.

• Blockchain and bitcoin company Abra raised $12M in series A funding from Ratan Tata and American Express in October 2015. “As people and businesses transact more globally, there’s a need for more convenient and affordable ways to move money, and we think the blockchain could play an important role in the evolution of money transfer and commerce, especially in emerging markets,” said Harshul Sanghi, Managing Partner at American Express Ventures.

• Coin.ph launched peer-to-peer bitcoin app for Southeast Asia last year, i.e., in July 2015. All transactions are denominated and held in local currency with Coins.ph using the blockchain as the rails to facilitate the exchange of funds.

The blockchain technology basically allows everyone to hold and make transactions as strangers but in a completely transparent manner. There is no mediator in between two people making the transaction, making the entire process transparent, safe and fast. Overall, global remittance is going through a positive change—there could be a variety of factors to it. However, with a certain confidence, it is impacted by the technological advancements within FinTech and the blockchain fever traversing across industries.

The blockchain technology basically allows everyone to hold and make transactions as strangers but in a completely transparent manner. There is no mediator in between two people making the transaction, making the entire process transparent, safe and fast. Overall, global remittance is going through a positive change—there could be a variety of factors to it. However, with a certain confidence, it is impacted by the technological advancements within FinTech and the blockchain fever traversing across industries.

Recent Posts

Leave a Comment

Start typing and press Enter to search

main-image