There is a clear trend around the world towards the adoption of cryptocurrency regulation.
Regulators monitor the cryptocurrency market with a certain degree of curiosity.
The best choice we can make is to negotiate with these regulators
Whether it’s peer-to-peer, with remittances to loved ones, or the B2B segment where businesses pay for goods or services, international transactions are part of a highly demanded process. This phenomenon is growing at a rapid rate. In 2019, McKinsey valued the international payments market at around $ 230 billion .
Despite the popularity of this industry, the current system is far from perfect. There is no way for international financial flows to avoid going through a chain of correspondent banks, so it is not possible for them to go through the blockchain at this time. This means transactions take a long time, and no one likes high fees.
Blockchain is growing
This is when blockchain technology comes into play, giving the financial industry even more room to innovate, with many benefits.
Firstly, making transactions through blockchain-based systems is cheaper, as this process requires fewer middlemen and therefore lower fees. According to Deloitte’s estimates, using blockchain for transactions will result in a 40% to 80% reduction in transaction costs .
Efficiency is another advantage: an international cryptocurrency payment can take a few minutes or even seconds, compared to several days of waiting with the typical banking system.
Financial security is also enhanced, as all actions are recorded in the blockchain. Likewise, the use of systems, personal keys, and the ability to add data to each transaction reduce the risk of theft or fraud.
While this area is still at an early stage of development, we already have access to a wide range of convenient cryptocurrency payment solutions that can improve outbound payments.
However, even given the technical capacity to conduct efficient international transactions, crypto-payment solutions face challenges regarding their implementation.
In 2009, blockchain visionaries dreamed of making direct one-click payments, without conversions or worrying about borders.
However, we must cooperate with existing financial systems and banks, which often reject such payments. Thus, we are faced with the impossibility of carrying out transactions abroad through cryptocurrencies.
The question is: “Is this temporary? What will happen in the future? ”
The future of payments
Personally, I believe in a future where overseas payments can be made with a single Fast Bitcoin (BTC) transaction . However, such a future requires regulation, but the potential is there.
Regulators monitor the cryptocurrency market with a certain degree of curiosity. They recognize that the use of blockchain technology is a solution that can revolutionize finance.
There is a clear trend around the world to adopt regulations to grow this market in a way that would suit local lawmakers. Many countries have already introduced their own cryptocurrency and blockchain policies and have started to develop new infrastructure.
For example, the UK has passed regulations and started accepting license applications from cryptocurrency companies.
In my opinion, reaching agreement with the regulators is the best choice we can make. However, we must be very careful. I doubt we can talk about the dominance of cryptocurrencies in the international payments market anytime soon.
Yet, we are definitely approaching the point in the evolution of finance where this type of transaction could become commonplace. Cooperation with the traditional market and its existing standards is an essential step in bringing cryptocurrency platforms closer to free operation.
We still have a lot of work to do, but cryptocurrency payments could become popular enough to compete with existing digital payment solutions and bank cards, if done correctly.