Is Bitcoin the answer to sending money overseas inexpensively?
The remittance industry is constantly in high demand and often attracts significant margins to the detriment of those who need it. However, with cryptocurrencies, especially bitcoin, flourishing globally, a chaotic shift is underway that could change how this billion-dollar industry operates or even reset it completely.
What is Remittance Payment?
A remittance is a type of payment sent to another party, particularly family or friends in less stable regions or situations. Remittances are commonly performed by people working away in foreign countries to support their families back home.
What is an Example of Remittances?
Suppose you are to think of the millions of migrants worldwide that leave their families to make some money to improve their circumstances. In that case, the money they send back home is a remittance, and why these payments are so important as even the smallest amounts can be life-changing.
Is Bitcoin Good for Transferring Money?
While not the perfect question, this one is more relatable to casual cryptocurrency users or those considering sending money internationally using bitcoin. A better question would be, is bitcoin good for transferring value, and the answer is a strong yes when you ask that. Transferring value with no chargeback risk and moving value across borders and between any country in the world is incredibly powerful, and these are all things that bitcoin does exceptionally effectively.
The Best Way to Send Money Overseas
While there are various ways to send money overseas, perhaps the best way to send money overseas is using bitcoin or other established cryptocurrencies. Using a P2P marketplace or local bitcoin exchange, you can quickly gain access to crypto to use for remittance payments or sell it if you are on the receiving end of the transaction.
The Problems with Traditional Remittances
For decades, companies like Western Union have held a stranglehold on the remittance markets in many regions; this becomes problematic when there's a lack of competition, and fees can creep up fast. Moreover, even alongside standard transfer fees, companies like Western Union often hide fees in the spread from the currency exchange aspect of a transfer. So traditional approaches are falling behind if you're looking for the cheapest way to send money overseas.
While these remittance companies manage to reach some parts of the world that struggle without access to stable traditional banking, they often rely on personal payment pickups, local agents, and workers on the ground. In the digital age, this business model lacks efficiency and struggles with significant events like the recent pandemic. However, while travel restrictions and even banks struggle to deal with cross-border payments to some degree, digital payment solutions and cryptocurrencies can continue confirming transactions without breaking a metaphorical sweat.
In short, price and speed are the most significant issues when it comes to traditional remittances.
Using PayPal to Send Money Overseas
PayPal is one of the most prominent digital payment solutions globally, and while some people assume this to be an excellent option for remittances, it's far from ideal. One of the most significant is when you need to cash out your PayPal balance. For those in the world where remittance payments tend to be the most important, having access to a bank account or even the required ID to verify with other payment providers can be a big ask. Unless the local grocery store accepts PayPal payments, you can quickly find yourself stuck without access to your funds.
How to Send Money Overseas for Free
You will always struggle to find a way to do this in the purely direct sense, but that doesn't mean you can't find out how to send money overseas without fees or at least minimize them by taking more control over your transfers.
Using Bitcoin, Ethereum, or even stablecoins like Dai and Tether enables you to send value to anyone anywhere. Thanks to the P2P trading industry flourishing worldwide, you can also cash out on the other end with minimal fees. It doesn't matter if you don't have a bank account, the flexibility of P2P enables you to use a vast range of payment methods, or if you use a P2P marketplace that supports cash trading (such as our own LocalCoinSwap), you can even trade in-person for your local currency with local cryptocurrency traders.
Sending Money Overseas with Bitcoin
Step 1: Find a source for bitcoin, ideally a P2P marketplace like LocalCoinSwap, where you can use any available payment methods.
Step 2: Get a compatible wallet address from the recipient and send the bitcoin. If you are sending a more considerable amount for the first time, consider sending a smaller portion first to test if you have the correct details.
Step 3: Wait for the transaction to confirm a few times on the blockchain so you can consider the transaction finalized. At this point, the recipient can begin trading or spending the bitcoin themselves, and you have successfully sent money overseas using bitcoin.
How Much Remittance is Sent in Bitcoin Per Year?
Between Africa, Asia, and Latin America, remittances using bitcoin and other cryptocurrencies stand in the billions of dollars. With countries like El Salvador beginning to accept bitcoin as legal tender, this will only likely increase in the coming years. As more remittances move away from centralized solutions like PayPal, MoneyGram, and even traditional banks using wire transfers, more money reaches its intended targets, which is hard to argue against being a net positive.
Is Bitcoin Changing Remittances?
Whatever your perspective, it's hard to argue that bitcoin and even many smaller cryptocurrencies are shaking things up when it comes to sending money overseas instantly and without needing a third party to facilitate your transaction or place limitations on how much you can send and to where.
Bitcoin is breaking boundaries, empowering people to exchange value on their terms, and making the vast world feel like a much smaller place in the best ways possible.