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Latin America region is facing high costs and challenges of traditional settlements. People sending money to their close ones have to face high rates of transfer and a good portion of the population is unbanked. And in the wake of resolving this issue, Bahamas Payment Platform, Island Pay, has become the latest company to offer crypto as a remittance option, Bloomberg reported.
Implement Crypto To Avoid High Costs
In Latin America and the Caribbean, Island Pay will roll out a digital wallet that uses Circle’s USDC stablecoin as its main medium of exchange. The wallet, known as CiNKO, will be offered in more than 30 nations and will enable users to fund prepaid cards, conduct business with vendors, and send payments to other users even if they don’t have a bank account.
“Our goal is to continuously look for ways to advance financial inclusion in the region and enhance financial experiences for both the unbanked and banked populations,” Island Pay CEO Richard Douglas stated.
Bloomberg reported that according to an email from Circle’s Chief Business Officer Kash Razzaghi, the CiNKO wallet is a component of a larger initiative to introduce stablecoins and decentralized finance protocols in Latin America. According to a recent report by Circle, the technology might cut the cost of sending money abroad by 80%. While receiving USDC on CiNKO wallets is free, depending on the blockchain the transaction is executed, there may be a “gas fee”.
The payment platform and fintech business based in the Bahamas are not unique. There are already dozens of cryptocurrency wallets and international payment platforms.
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What Is The Need Of Crypto Payments?
The World Bank reports that the average cost of shipping $200, for instance, is 6.2% and that using conventional financial intermediaries can often take days. Despite this, remittances to Latin America and the Caribbean increased by 27% in 2021 and 11% in 2022, reaching $145 billion in 2017. Remittances are anticipated to reach an all-time high despite the region’s GDP slowing to 3.3% this year.
According to Monica Talan, the founder of CryptoConexion, an educational portal on Web3 and decentralized finance, one of the primary obstacles to cryptocurrency remittances is the ease of use. There aren’t many locations to spend Bitcoin or ether in the majority of Latin American countries.
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