In recent years, cryptocurrencies have been a huge disruptor to financial institutions and trade. Now, they are also revolutionizing the international money transfer process.
Understanding how virtual currencies operate
How can I transfer money overseas without incurring expensive fees? It is a subject most of us have pondered.
Before discussing how to utilize cryptocurrencies for international money transfers, however, it is important to grasp the principles of cryptocurrencies.
Cryptocurrencies are digital assets that may be traded for goods and services rather than conventional fiat currencies such as the US dollar, European euro or Philippine Peso. They are decentralized, meaning they are not supported by a central authority like a bank or government. There is no intermediary between you and the recipient of your payment, so you have complete control over your bitcoin wallet.
Bitcoin is the most well-known cryptocurrency, however there are already over 6,000 cryptos and this number is rapidly expanding. Other market leaders include Ethereum, Ripple, and Cardano.
Blockchain is the underlying technology of cryptocurrencies. Blockchain is a distributed ledger that records transactions of digital assets such as bitcoins.
On the blockchain, every virtual money is traceable, meaning that every coin has an owner. This makes ‘cheating the system’ almost difficult, and is the reason why cryptocurrency trade can thrive without monitoring from banks or other authorities.
International currency transfers
When it comes to international money transfers, Bitcoin and other cryptocurrencies are among the least expensive options. For example, you can easily exchange bitcoin cash to PHP and send them to the card if you need Philippine pesos. Due to the decentralized nature of bitcoin transactions, you do not have to pay the many fees paid by intermediaries for a conventional wire transfer.
In addition to cost savings, cryptocurrencies are an appealing alternative for international money transfers for a number of other reasons.
- Unlike banks, such services are often available 24/7. In many instances, transactions occur immediately.
- Because cryptocurrencies are not connected to banks or government entities, you may transmit as much money as you want at any time.
- There are hundreds of ways to transfer bitcoins, with a variety of payment methods and platforms suitable to various nations of destination.
- With a standard international bank transfer, you entrust your funds to a third party and hope they reach their destination. With a cryptocurrency transfer, you can always know the precise location of your cash.
Are wire transfers in cryptocurrency free of charge?
In a nutshell: it depends. If you have a wallet on a certain exchange or platform, you may transfer crypto to another user’s wallet without incurring any fees. Others may impose a little fee.
In addition, you will be able to make conversions on your own, and convert your own cryptocurrency into the money of the country in which you are located and send it to your card. For example, with LetsExchange you can convert WEMIX to PHP when you need this currency.
However, compared to using an MTO or a bank, sending money internationally using crypto is often one of the most cost-effective options because of the elimination of costs and favorable exchange rates.