In today's globalized world, the demand for cross-border remittances is increasing, especially for low- and middle-income countries, where remittances have become an integral part of their economic lives. According to the data, remittances to low- and middle-income countries are estimated to increase by 5% in 2022, reaching $620 billion. However, traditional cross-border transfer methods are often plagued by hidden fees, slow processing times and high costs, making sending money overseas cumbersome and expensive.
Challenges of traditional remittances
Globally, the high cost and inefficiency of remittances have been pressing issues. According to a monitoring of global remittance prices, many remittance services still rely on the traditional financial system, which leads to various inconveniences in the remittance process. With the advancement of technology, especially the emergence of blockchain technology, this is all changing.
The Rise of Blockchain: Take the Stellar ecosystem, where two innovative companies, FinClusive and Anclap, are redefining the remittance industry. These companies offer a more economical and compliant way to send money using stablecoins such as Circle’s fully-reserved USD Coin (USDC) and Colombian peso-backed stablecoins. The use of these stablecoins not only reduces the volatility of remittances, but also speeds up transactions, ultimately providing users with an efficient solution that seamlessly integrates with local financial systems.
According to the results of the pilot project, the average cost of using stablecoins to send money via blockchain is about half that of traditional methods, and this cost may be reduced further as transaction volume increases. This result shows the huge potential of blockchain technology in the field of remittances.
Advantages of Stellar Network
Denelle Dixon, CEO of SDF, noted that this pilot program demonstrates the practical advantages of the Stellar network in facilitating cross-border value flows. She said that the interoperability of the Stellar network can significantly improve the speed and affordability of remittances, which is a boon to users around the world.
FinClusive, a regulatory technology company, recognizes that blockchain networks like Stellar can provide faster and more cost-effective alternatives for remittances and cross-border transactions. This pilot project is a concrete example of how blockchain technology can bring benefits to individuals, businesses and governments around the world.
Increased financial inclusion
Anclap provides an interoperable fintech infrastructure that allows the conversion of fiat currencies into stablecoins and connects blockchain-based solutions to local banking and payment systems in Colombia. This innovation allows Latin American currencies to gain greater global exposure, fueling the growth of local economies and expanding the financial system’s ability to provide better services to more people.
Anclap’s integration with FinClusive demonstrates Stellar’s potential to optimize cross-border value transfers, highlighting cost and speed improvements and enhancing the existing capabilities of the underlying network. Anclap’s Send platform is powered by FinClusive’s compliance solutions and aims to solve financial inclusion challenges by making financial services more affordable for all.
"This pilot program demonstrates that decentralized finance (DeFi) offers a viable alternative to traditional finance that can solve the biggest challenges facing underserved communities," said Amit Sharma, CEO of FinClusive. Anclap's alliance Founder Ivan Mudryj emphasized that developing economies have excellent opportunities for rapid development by connecting to the global payment network.
in conclusion
With the development of blockchain technology, the hassle and high cost of traditional remittances are gradually becoming a thing of the past. The XLM token and the Stellar ecosystem behind it are leading this change, making cross-border money transfers easier and more affordable than ever. In the future, as more financial technology companies join the industry, cross-border remittance methods will become more diverse, bringing a better experience to global users.
In this rapidly changing era, let us look forward to the future development and application of XLM tokens and blockchain technology, bringing more possibilities and convenience to global remittances.