Opinion | The age of ‘bankless’ global money transfer dawns as blockchain technology sounds the death knell of money changers
- Global remittances to developing countries rose to US$466 billion in 2017
- Average fee on a US$200 transfer was 7.45 per cent, excluding additional fees hidden in the exchange rate
The global money transfer industry is under threat. With high fees, a war on cash and the growing trend of “de-risking” by banks, the traditional means is no longer effective in serving the two billion people who are unbanked.
Bankless, cash-based societies are where the real money transfer market lies, with global remittance flows to developing countries reaching a record of US$466 billion in 2017.
In recent years, blockchain technology emerged as the solution to enable a global money transfer system to operate without the need for banks. It is easy to forget that bitcoin was born only 10 years ago, or that it spurred an array of blockchains geared to make international money transfers cheaper.
There was no alternative before this to send money internationally without banks, other than costly alternatives such as Western Union, MoneyGram and the like.
To build a cheaper and practical bankless money transfer ecosystem requires the development of various intricate layers of transferring cash from one country to another, and connections to global currencies.