Bitcoin can reduce 97% remittance fees: Research
Coinbase report noted that US citizens pay a $12 billion fee per year for remittances but crypto may reduce these fees by 97%.
Coinbase is a Nasdaq-listed crypto company, which trades under index COIN on the Nasdaq exchange. In the crypto sector, Coinbase is a highly regulated crypto company. The high compliance-based legal status of this company favours US agencies to use tools developed by Coinbase engineers to track crypto transactions.
On 3 April 2023, the Coinbase team published a blog post on the problem associated with the current cross-border payment system & noted that Cryptocurrencies have the potential to overcome these issues.
Crypto exchange’s research noted that US citizens are paying an average of 6.18% fees for every cross-border payment settlement. On average, the US population pays nearly $12 billion in the form of remittance fees.
The report noted that the traditional payment system charges for fund Settlement on both sides and also they charge for the conversion of currency.
According to Coinbase, cryptocurrencies have better potential against these high transaction fees & charges, as transaction fees on the Bitcoin Network is $1.5 and on the Ethereum network is $0.75.
The complete research on these things by the Coinbase team found that the use of cryptocurrencies in cross-border payments may reduce the traditional settlement cost by 96.7%.
US Crypto Adoption & Challenges
Surveys conducted by several crypto companies over a couple of years showed that 6% of US adults are holding cryptocurrencies and this adoption rate is surging since 2019.
However, Coinbase’s report is showing that cryptocurrencies are winning against traditional financial systems but the report fails to bring light on the problem associated with cryptocurrencies transactions under different jurisdictions.
Here we can take an example of a cross-border payment by a person from the US to India. If sending $1,000 worth of crypto assets from the US to any other wallet, located in non-US jurisdiction (India), is legal then still there will be a very very big legal challenge.
In the present time crypto is not regulated under the jurisdiction of India and accepting payment in the form of cryptocurrencies from the US or another country will be subject to a violation of the FEMA act as well as a violation of the released guidelines by the Central Bank of India, under which cryptocurrencies can’t be used as a legal tender.
Read also: $114 M seized by Indian enforcement agency linked with crypto crimes
