The decentralization and peer-to-peer transaction feature of Bitcoin makes it an ideal candidate for cross-border fund transfer. The remittance carried out in such fashion is not only faster than other conventional means but cheaper as well. A startup, bridge21 is making use of the cryptocurrency’s quality to offer faster, cheaper remittance between the United States and Mexico.
The “Great Wall” between the United States and neighboring Mexico has been in the news a lot lately. Donald Trump, soon after taking over the mantle of the President of the United States of America announced that he would be going ahead with the construction of a wall between two countries, which will be paid for by Mexico. When the predominantly Spanish-speaking North American nation rejected the proposal, it was followed with threats of increased taxes, remittance blockade, etc. One good thing that ever came out of this incident is an increased interest in Bitcoin-based remittance among people who regularly send money back home in Mexico.
Bridge21 allows individuals with a United States bank account to transfer money to a Mexican bank account within minutes. During the transaction process, the money from sender’s US account will be withdrawn to purchase Bitcoin, referred to as “digital cash”. The purchased digital cash is then transferred to Mexico, to be sold for pesos and deposited into the receiver’s bank account. The transaction will be credited following a single confirmation on the Bitcoin blockchain.
The CEO of bridge21, Will Madden was quoted in one of the publications saying,
“Our rates are based on the price of digital cash in the sending and receiving countries, not the bank exchange rates used by everyone else. This means we can often send money at rates no other money transfer company or bank can offer.”
According to reports, the transaction fees charged on bridge21 is 2% to 5% lesser than that of conventional transfer methods, making it an attractive option for many.
The model adopted by bridge21 is not new, but given the size of remittance market, there is a tremendous opportunity in front of it. Also, the platform has no reason to stop with Mexico, and as per its plans, the service will soon be expanded to other nations as well. The recent developments in cryptocurrency space have put startups like bridge21 and established banking institutions on the same plane where everyone is trying to utilize cryptocurrency/blockchain technology to provide efficient fund transfer service, and this trend is not going to stop anytime soon.
Ref: Payments Source | Image: Shutterstock