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Bitcoin's Revolution in Overseas Remittances

Bitcoin being used for cross-border remittance
Bitcoin being used for cross-border remittance

The global remittance industry, a $540 billion-dollar behemoth, has been ripe for disruption. Traditional Money Transfer Operators (MTOs) have long held sway, but the emergence of Bitcoin is changing the game. Let's delve into how Bitcoin is becoming an attractive medium for international remittances, the challenges, and the future prospects.

What Makes Bitcoin Attractive for Overseas Remittances?

Bitcoin's borderless nature and decentralized system offer a unique solution to the high costs and inefficiencies associated with traditional remittance methods. By removing intermediaries, Bitcoin can facilitate remittances by reducing costs and providing quicker transactions. Traditional remittances can incur average fees between 5% and 9.3%, whereas Bitcoin's decentralized nature can significantly lower these costs.

The appeal of Bitcoin in the remittance sector is not just about cost-saving. It's also about accessibility and speed. With Bitcoin, transactions can be completed within minutes, and the need for physical banking infrastructure is eliminated. This makes it particularly appealing in regions where banking services are limited or costly.

Understanding Traditional Remittance Industry

In a typical remittance payment, a customer pays local currency to an MTO, and the recipient collects the money in the destination country's currency, minus any fees. Most MTOs operate through a network of a larger remittance software provider (RSP), leading to high costs, particularly for smaller remittances. The lack of transparency in exchange rates adds another invisible cost to the consumer.

The traditional remittance industry is burdened with regulatory compliance, capital controls, and other restrictions. These factors contribute to the high costs and often slow processing times. The World Bank's report highlighting the global average cost of sending $200 in the third quarter of 2020 as 6.8% underscores the need for more efficient solutions.

How Does Bitcoin Facilitate International Money Transfers?

Several blockchain startups offer services to facilitate Bitcoin remittances without requiring users to understand complex technology. Companies like Satoshi Citadel Industries/, AZA Group, Bitso, RippleNet, and BloomX are replacing traditional RSPs with software to facilitate Bitcoin transactions. This innovative approach allows for immediate transactions and minimizes holding virtual currency tokens.

These services are not just about leveraging Bitcoin's technology; they're about reimagining the entire remittance process. By using Bitcoin as a bridge between fiat currencies, these startups are able to bypass traditional banking channels, reducing costs, and increasing efficiency. The result is a more streamlined and user-friendly experience for both senders and recipients.

Concerns About Bitcoin Remittances

Despite the advantages, there are concerns about Bitcoin remittances, including the potential for money laundering. Banks and Money Transfer Operators have strict reporting requirements, and international regulations limit the countries and individuals that can receive payments. This raises questions about the security and legality of Bitcoin remittances.

In addition, sending Bitcoin also has transaction fees, which can be unpredictable. In February 2021, the average Bitcoin transaction cost was reported to be $23, making it more expensive than traditional remittances for small transactions. This unpredictability in fees is a significant barrier to Bitcoin's widespread adoption in the remittance industry.

Alternative Cryptocurrencies for Remittances

Bitcoin's increasing transaction costs have led to the exploration of alternative cryptocurrencies like Ripple and Dash. These digital currencies are targeting the remittance market with substantially lower fees, offering more affordable options for international money transfers.

The rise of alternative cryptocurrencies highlights the dynamic and competitive nature of the blockchain industry. As technology evolves, new solutions are emerging that challenge Bitcoin's dominance in the remittance space. These alternatives may provide the key to unlocking the full potential of blockchain technology in international money transfers.

The Future of Bitcoin in the Remittance Market

International remittances are one of many financial industries that have been suggested as a possible use case for Bitcoin transactions. While the high cost of traditional services makes Bitcoin an attractive alternative, the increasing cost of Bitcoin transactions has made it less appealing for remittances.

However, the continuous innovation in the cryptocurrency space and the development of alternative digital currencies present promising prospects for the future of overseas remittances. The exploration of new technologies and the adaptation of existing ones will likely shape the future of international money transfers, making it an exciting space to watch.


Bitcoin's role in the overseas remittance market is a testament to the cryptocurrency's potential to disrupt traditional financial systems. By offering a more efficient and cost-effective solution, Bitcoin has positioned itself as a viable alternative to conventional remittance methods. However, challenges such as high transaction fees and regulatory concerns must be addressed to fully realize Bitcoin's potential in this industry. The exploration of alternative cryptocurrencies and continuous innovation in blockchain technology will likely shape the future of international money transfers, making it an exciting space to watch. The journey of Bitcoin in the remittance industry is far from over, and the coming years may witness even more transformative changes.

Bitcoin as cross-border remittance
Bitcoin as cross-border remittance

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