Bitcoin can become a great currency for migrant workers. However, according to some observers, migrant workers may also support the cause of Bitcoin and help it become a far reaching currency.
According to market observers, getting into remittances would be a big prize for Bitcoin as there is a huge market to unleash. Bitcoin startups can make huge profit from the remittance market where charges are higher for migrant workers.
For instance, the average fee on remittances is close to nine percent of the transaction cost. In fact, some banks even charge additional ‘lifting’ fees which may go up to five percent when someone wants to turn the remittance into cash. Nonetheless, sending money to the native country is still a major issue for migrant workers from India, China and South America.
Remittance constitutes the second largest financial inflow to many developing countries, exceeding international aid. The World Bank Report in 2012 claimed that the $401 billion new remittance record went to developing countries with overall global remittances that also includes developed countries, topped $514 billion.
Thus, remittances are playing a vital role in economic growth and to the livelihoods of people worldwide, particularly the ones in developing nations like India, Mexico, Brazil, etc. Several economists also believe that remittance transfers promote access to financial services for the sender and recipient; thus, they increase financial and social inclusion which plays important role in empowerment of poor.
How Bitcoin Companies can Cash in the Opportunity?
Several Bitcoin startups are looking to cash in the golden opportunity as they believe that remittance is the best thing to happen for virtual currencies like Bitcoin and Ripple. In fact, Ripple Labs which has come up with a solution wherein any pair of people with Ripple Labs accounts can now use the software to move money.
Currently, remittance market is being dominated by Western Union (WU) which brought in $4.6 billion in transaction fees charged to consumers last year and earned almost $1 billion further in foreign-exchange revenue from its consumer business. Bitcoin companies estimate that if WU can make such a huge some with higher charges, there is definitely a great scope for them.
Bitcoin Can Play Powerful Role
Remittances play immense role in the national economies of the migrant workers; they not only provide financial support to the family of the migrant worker but also generate hope.
For some individual recipient countries, remittances are as high as a third of their GDP; Bitcoin with its strong infrastructure can help such economies and people.
To contact the reporter of this story: Deepak Tiwari at firstname.lastname@example.org