Coinbase, the San Francisco-based cryptocurrency exchange, launches a new payments service for users to "send money internationally for free." Is this a sign of the company's future involvement with remittance?
The exchange will be using two cryptocurrencies for the service, XRP, and Coinbase's stable coin called USDC. XRP is the third-largest cryptocurrency by market capitalization. Tokens from the US-based tech company, Ripple, was added to Coinbase in late February. Despite being involved in a lawsuit, Coinbase still went ahead with listing XRP. However, the decision to do so becomes clearer with Coinbase's international payment service.
“You can now send money to any user with a Coinbase account around the world using XRP or USDC. By using cryptocurrencies that are optimized for cross-border transmission, you can send and receive money virtually instantly by sending those cryptocurrencies and having the recipient convert them into local currency.”
Coinbase Entering the Remittance Market?
Could this be a sign that Coinbase is actually looking to utilize the potential of Crypto and Blockchain for remittance purposes?
Coinbase customers will have access to the no-fee service when sending to other users. Users are able to transact money (or the equivalent value) at zero cost due to blockchain technology. Otherwise, Coinbase will charge “a nominal on-chain network fee for sending outside of Coinbase.”
On the page, however, it clearly states "This is not a money remittance; rather, it is a cryptocurrency transaction with conversion into local currency after receipt." The company also notes that “in countries where Coinbase does not support the local currency, recipients need to transfer their XRP/USDC to an exchange that supports exchanges from XRP/USDC to local currency.”
Coinbase has yet to make an official announcement for the service. Therefore, the true motive behind this service is unknown.
Cryptocurrencies for Remittance
In 2019, we hear so many companies leveraging on the potential of blockchain technology for remitting purposes. Although Coinbase has yet to confirm its involvement, it is obvious that the world of finance sees blockchain as a natural progression in fintech. As a result, we see a rise of both mainstream and new companies attempting to make this a reality. Here are some examples:
- Facebook - Facebook and Whatsapp Set to Become Remittance Players With Crypto?
- Samsung - 3 Ways Samsung is Breaking Down Walls For Global Crypto Adoption
- WhatsApp - Wuabit Set To Release Crypto Wallet for WhatsApp Next Month
- PayPal - PayPal Targets Identity Ownership With Its First Blockchain Investment
- JPMorgan & Chase - 3 Reasons Why JPM Coin By JPMorgan Chase Is Great
The Issue with Cashing Out
We discussed the issue in our article. There are plenty of companies doing remittances using cryptocurrencies. However, there is no easy way to cash out your cryptocurrencies without going through a centralized system (banks). Therefore, it is safe to say there is a huge gap in the remittance market. Here, we introduce MoneyFi.
MoneyFi is an exciting new addition to the growing list of companies. Implementing MoneyFi will downsize the cost of the remittance process worldwide due to its innovative approach. The MoneyFi App shall integrate into an existing infrastructure consisting of a global ATM processing network. They will develop a new fiat-crypto hybrid ATMs. Due to that, MoneyFi will put USD16 Billion dollars back into people's pockets. That is an equivalent to feed 2.5 Million persons per day for a full year. To read more about MoneyFi, be sure to read our latest article - How MoneyFi can Disrupt the Remittance Market with Blockchain
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About The Author:
Iliya Zaki is the Head of Marketing & Business Development for Moonwhale Ventures. Based in Singapore, Iliya manages the marketing and public relations aspects for Moonwhale as well as clients under advisement. He is also a regular writer for Hackernoon and several other publications such as Investing.com, Daily Hodl, Securities.io, and many more.