- Stablecoin firm Paxos believes that blockchain can improve the flow of global remittances.
- Blockchain’s utility in the global economy includes poverty reduction and stabilizing economies.
- Blockchain technology can provide additional benefits like security, transparency, and cost-efficiency.
Paxos Trust Company, the stablecoin giant based in New York, believes that blockchain technology can improve the flow of global remittances. Global remittances refer to the payments made by parties or individuals abroad to their home countries. Remittances are a considerable addition to the flow of funds in any economy.
Paxos was the issuer of Binance’s BUSD stablecoin, which was the world’s third-largest by market capitalization until earlier this year. The firm will also issue PayPay’s recently launched dollar-pegged stablecoin PYUSD. Paxos Trust Company is also licensed by the New York Department of Financial Services (NYDFS).
According to a blog post by Paxos earlier today, remittances have a direct impact on poverty reduction and consumption in an economy. Global remittances provide a reliable source of income for its recipients, enabling the purchase of basic needs including food, shelter education, and healthcare, which in turn stimulates the economy.
Global remittances also play a considerable role in the stability and resilience of an economy. Paxos stated that remittances can act as a stabilizing factor during periods of economic unrest by offering a steady source of income. Remittances also come in handy during natural disasters and other hardships.
“Blockchain enables near-instantaneous cross-border transactions, bypassing the delays associated with traditional banking systems. This speed is particularly advantageous for recipients who urgently need the funds for immediate expenses,” Paxos stated.
Paxos added that blockchain technology could help the global remittance landscape by offering innovative technological solutions. This would include enhancing security and transparency through its decentralized and immutable nature. Blockchain could also eliminate intermediaries that are usually involved in traditional remittances, enabling high-speed transactions with low fees and associated costs.
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