Global trade has been escalating at a rapid pace ever since the mainstream adoption of the internet with more and more people working in foreign lands than ever before. Most of this workforce sends portions of their income back to families or friends in their native land. This process is a form of remittance and actually requires a decent percentage of the amount sent to be charged as a fee by the payment processor at each point in the ridiculously long route between starting point and actual destination. The World Bank recently reported that India received the largest amount of remittance in 2017 at almost $70B and was likely to continue this surge throughout this year.
According to an Analysis of Trends in Cost of Remittance Services, it was found that South Asia remains the cheapest region to receive remittance with an average cost of 5.4%; for a worker to send his or her family $1000 from the USA, it would cost them over $50 to do so. These fees add up very quickly.
Over the last decade, the rapid pace at which the digital economy has developed continued to change the dynamics of the remittance industry, however transacting across global borders has persisted to be costly. Introduce into this landscape blockchain and cryptocurrencies. Despite the fact that India’s consideration on cryptocurrencies has been little to none and the Reserve Bank of India ordered banks to end any relationships with crypto- or blockchain-based companies, what if they were to consider such a technological innovation that has the capability of affording money to move as quick as email,across frictionless borders moving simply between two points in the corridor and with transaction costs of near-zero fees?
One could definitely argue that working with such technology would have quite a profound impact on their economy and workforce benefiting all parties involved.