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Expats using cryptos to send money home to save transaction costs

Expats using cryptos to send money home to save on transaction costs

Highlights

  • According to a World Bank report, remittances to India are valued at around $ 80 billion, or around Rs 6 lakh crore, per year.
  • These remittances are mostly done through banking or other financial channels.
  • Industry trackers have said that the way Indians are preparing for crypto assets as well as decentralized finance, remittances through crypto assets are only growing.

New Delhi: Many expats, who used to transfer money to their families in India every month using cross-border currency services, are now trying another route to send money home, as it helps them save commissions while making the transaction faster. According to a report in the Economic times, they buy cryptocurrencies and give their families access to their wallets so that they can use them.

Many Indian, Pakistani, Bangladeshi and Filipino expats are increasingly experimenting with cryptocurrencies to send money to their families back home and save on commissions charged by wire transfer companies and other intermediaries. “The process of sending funds via cryptocurrencies in India is much more efficient and faster than the conventional process, and all transactions are visible on the blockchain network from a regulatory perspective,” the publication said. quoted by Edul Patel, CEO and co-founder of Mudrex, a global crypto investment platform.

Crypto investments have seen a surge even in small towns in India and people are exploring various uses, industry trackers have said.

“Looking at the current hype in crypto assets like Bitcoin, Ethereum, Binance Coin, United Farmers Finance and Grain, it should be easy to transfer money to India and around the world,” the financial daily Santhosh quoted. Bhhandarii, co-founder of United Farmers Finance. , a crypto farming platform as said. “Additionally, you can earn more with this crypto by staking or providing liquidity in our ecosystem,” Bhhandarii said.

It should be mentioned here that, according to a World Bank report, remittances to India are valued at around $ 80 billion, or around Rs 6 lakh crore, per year. These remittances are mostly done through banking or other financial channels. Industry trackers have said that as the way Indians prepare for crypto assets as well as decentralized finance, remittances through crypto assets are only growing, especially as the transfer of smaller amounts can be expensive via traditional services. Globally, several blockchain startups like Satoshi Citadel in the Philippines have started offering services to facilitate user-friendly bitcoin transfers.

There are nearly 15 million crypto investors in India who hold digital assets worth Rs15,000 crore. All of the major cryptocurrency exchanges have seen at least 100% increase in their trading and investment in the past few months, the HEY report mentioned.

Although Bitcoin has been the preferred choice for remittances, its transaction costs are rising, experts say. Currencies like Ripple and Dash are considered good replacements due to significantly lower fees.

For Afghans, cryptocurrency remittances have become a lifeline as Western Union ceased operations for a while after the United States withdrew from Afghanistan.

Experts also said crypto is becoming popular in high-inflation places like Lebanon, Turkey and Venezuela. Experts point out that crypto remittances are favored because people want to protect themselves against hyperinflation.

Most of those looking to send money do so through some of the less volatile crypto assets such as Stablecoins, industry trackers have said.

“While paying money, users would want the value to stay as expected, unhampered by market volatility,” Patel of Mudrex said. “Stable coins indexed to the US dollar are the preferred choice for conducting such transactions. Users mainly use stable currencies like USDT / USDC to make these transfers.

Cryptocurrencies continue to thrive in India in the absence of any regulation.

The Reserve Bank of India (RBI) has had a confrontation with cryptocurrency exchanges in the past. The central bank had asked banks to stop dealing with crypto exchanges, but had to back down following a Supreme Court order.

The government is considering defining cryptocurrencies in a new bill and may treat them as an asset / commodity for all purposes including taxation.


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