Remittance is the money transferred to another party, usually from a migrant to a recipient back in their home country. People can make remittances through wire transfers, international money orders, Money Transfer Operators (MTO), and e-wallets.
But recently, remittances through cryptocurrency are becoming more common, particularly through bitcoin. As the world becomes more digital, consumers prefer new methods that offer cost savings and speed. Money transfer through cryptocurrency addresses some of the issues of the traditional remittance channels.
In a typical remittance transaction, the sender acquires the services of a remittance agent to transfer money to someone abroad. They usually pay with cash, check, money order, credit card, or debit card. After the payment, the sending agent instructs its branch in the destination country to deliver the money, now under the local currency. The remittance process is complete when the beneficiary receives the money.
Traditional remittance methods like wire transfers and MTOs have long been the people’s top choices when remitting money. However, people have also been putting up with their disadvantages.
For one, the processing can take up to five business days in bank-to-bank transfers. While senders can choose to speed up the processing time, it would be in exchange for a higher remittance fee.
The costs of the remittance service can be very expensive due to the institution’s compliance with Know Your Customer (KYC), Anti-Money Laundering (AML) regulations, and other capital controls. On average, remittance fees around the globe are at 6.3% of the amount sent.
Moreover, express fees for immediate transfers can cost up to 50% more than the economy fee. Therefore, if the purpose of the remittance is urgent, individuals have to pay a larger service fee as a trade-off for speedier processing.
Lastly, Banks and MTOs are not available all the time. Physical locations have definite operating hours and are usually closed during the weekends and holidays. This is inconvenient, especially when people need to send remittances for emergency purposes.
How Cryptocurrency Remittance Works
Remittances through cryptocurrency mediums work similarly with the traditional methods. For this to work, both the sender and the receiver must have a cryptocurrency wallet or account. But those who are unfamiliar with how cryptocurrency works can choose to contact someone who does and have them send or receive the remittance on their behalf.
For example, if the sender needs to send £500 from the UK to the Philippines, they first need to exchange this amount to cryptocurrency. To do this, they can buy cryptocurrency through an exchange or peer-to-peer marketplaces. Once they have the equivalent crypto value, they will need the wallet details of the recipient to send the purchased coins. After receiving, the receiver needs to exchange it, this time from crypto to fiat currency.
Advantages of Bitcoin for Remittance
Because of its popularity and borderless characteristics, bitcoin is an attractive medium for remittances. And as bitcoin remittances are increasing, several blockchain startups now facilitate and smoothen the remittance process without the need for a deep understanding of cryptocurrency and blockchain technology. Therefore, sending money abroad or receiving money in the Philippines using crypto is easier and more convenient.
Here are the other advantages of using bitcoin for remittance.
One of the biggest drawbacks of the traditional remittance methods is the steep costs of the transaction. As much as possible, people want to avoid hefty transfer costs that reduce the amount they eventually receive. This sentiment is especially true for those who transact low-value remittances at regular intervals.
But with crypto exchanges, the sender avoids the high transaction fees. This is possible because transferring crypto assets directly from user to user charges a low flat fee. With barely any middlemen, users do not have to pay extra for intermediary fees. And as long as they do not hold the crypto in the wallet for long, the chances of losing money due to changes in crypto prices are low.
Another big advantage of bitcoin remittance over the usual methods is its processing speed. When sending a bitcoin to someone, it passes through a process involving the changing of BTC address, verifying the blockchain, and completing procedures between wallets. All of this is done by the blockchain, so on average, the transfer of bitcoin between wallets can take 10-20 minutes to finalize. In contrast to MTOs and banks, it is faster, convenient, and more straightforward.
Cryptocurrency has no central governing body that regulates its activities, which means that holders can send as much as they want, anytime and anywhere. Therefore, time and day are not a limitation, and one can send and receive the money even at night, on the weekends, and on holidays. Moreover, migrant senders also avert the unfavorable exchange rates of some MTOs.
Accessibility and Flexibility
Bitcoin and other cryptocurrencies are a useful way to send money to countries, territories, or regions with restrictions in their financial system. Thus, it gives opportunities to underprivileged populations.
Moreover, it offers flexibility, for there are many different ways to buy or use bitcoin. Bitcoin buyers can choose several payment options and have no limitation as to the amount they want to transfer.
As long as users watch out for scams, the blockchain technology behind cryptocurrencies provides strong security against fraud and swindling. Blockchain encrypts transactions throughout the network, creating time-stamped records of the transaction, which are very difficult to hack.
Where to Buy Bitcoin in the Philippines?
Need bitcoin to send it abroad, but don’t know where to buy bitcoin in the Philippines? You can now buy and sell bitcoin and other digital assets in the Philippines with confidence through Coexstar PH bitcoin exchange Philippines.
Coexstar PH is one of the best Virtual Asset Service Providers (VASP) in the Philippines, where one can buy and sell the world’s famous coins. It is registered in the Securities and Exchange Commission (SEC) and regulated by the Bangko Sentral ng Pilipinas (BSP). All activities in the platform are subject to the rules and regulations of the BSP and Anti-Money Laundering Act (AMLA).
The company believes that all crypto traders need a secure, convenient, and efficient exchange platform. As such, Coexstar PH provides a stable server operation with top security features that safeguard users’ assets. Visit our website at info.coexph.com/ today to get started, or contact us at email@example.com to learn more.