Blockchain technology connects global financial systems so they are easy to use, efficient, affordable and accessible.
This can reduce the cost and timing of border payments.
Confidence in blockchain technology is growing as more and more governments and businesses invest in these areas.
What’s wrong with border payments today?
It is no secret that cross-border payment using traditional railways is fraught with toll, obstacles and delays. Each sender receives an additional $ 1 billion in cash each year. Global businesses choose to bear the cost of FX or transfer that money to their customers. And all those involved must wait days or weeks to complete the transaction. Fact: Transferring money through traditional instruments is far from an unlimited experience.
Part of the problem is that the systems do not work together. Sending money to different parts of the world without blockchain, all patchworks have been seamlessly put together for decades to achieve similarities in financial transactions between financial institutions, correspondence banks and money transfer operators. Connecting these different systems, especially in the unsaved markets, where local currency can be sold globally, has created a conflict that leads to long delays and high costs for each link in this series.
Just over the past year, the G20 has made improving border payments a priority, citing the benefits of a faster, cheaper, more transparent system that can bring citizens and the global economy, and increasingly, global policymakers realize that blockchain technology can solve the time-consuming financial infrastructure problem.
But the solution is not just obvious – the solution is here. Blockchain technology brings its promise with unlimited pay across the border today.
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Blockchain technology demonstrates that we can connect financial infrastructure so that anywhere in the world, systems and value types can work together.
Stellar, a global, social blockchain built to work together and advance financial access and integration, has a network of more than 20 anchors worldwide that are integrated components of global financial systems. These anchors are regulated financial institutions, financial services businesses, or fintech companies that issue fiat 1: 1 tokens (also known as solidcoins) and / or provide fiat on / off-ramp. The aim is to open up markets to new payment and payment corridors, such as between Europe and Nigeria, the largest Sub-Saharan remittance market in Africa.
For example, Cowrie Integrated Systems, a financial technology company with headquarters in the United Kingdom and Nigerian offices, offers value-added services through electronic payment networks. With the latest guidance from the Central Bank of Nigeria, Cowrie designed a payment channel to benefit USDC, one of the world’s leading currencies, as a bridge to help businesses reduce disputes over remittances to Europe.
Working with Tempo, a French-based electronic payment and EURT issuer, euro solidcoin also targeted 1: 1 fiat stocks, creating a bi-directional channel for customers to redeem and trade these tokens instantly. This has led to cost savings and time and demonstrated the ability to connect global financial systems to work more efficiently, effectively, affordably, and most importantly.
Openness, creativity and collaboration
Once we realize that the future of the blockchain we have been dreaming of really exists, right now, we have to ask ourselves if we are building long-term solutions
Open networks allow for innovation from more than just a few. Open networks ensure that anyone can build on, develop and challenge technology and push the market to consider the next idea. Open networks promise collaboration and allow for continuous thinking and continuity. If we were to start building this technology in a cell, on closed networks that could not work together, we would be putting ourselves at risk of getting back to where we started. By working together in an open space to connect traditional and digital financial railways, we can reap the benefits and work through shared challenges.
Making the blockchain more common
Confidence in these technologies, especially in digital finance, is growing across the board. Governments are accelerating their work on Central Bank Digital Currencies. Businesses create and invest, with many global executives surveyed by Deloitte last year saying they believe digital assets will be important to their industries over the next three years.
But the benefits of innovation, especially in the financial sector, cannot be realized with the added risk to consumers. Central banks and regulators, entrusted with the responsibility of protecting consumers, drafting and enforcing regulations governed by that high responsibility. However, as the Tempo-Cowrie example shows, when used properly, blockchain technology can be used to serve consumers without sacrificing control, accountability or regulation.
That is why it is so important for us to show participants what the difference this technology can make to consumers, citizens and businesses, to grow the local and national economy – and how the technology can be managed under controlled management. That is why it is important for the private sector to work with government to ensure that the new regulations balance the need for new and improved financial systems and the need to monitor new inputs.