Decentralised.co: Stablecoins Cannot Solve Legal Issues in Remittances

Decentralised.co points out that the cost of sending $200 across borders is 6.36%, down from 9.67% in 2009, with the UN aiming to reduce this to 3% by 2030. The remittance process involves three parts: receiving, transferring value, and payment, with the intermediate steps being slower and already the cheapest part. Receiving and payment require licenses, bank accounts, compliance, and payment networks. Remittances from Dubai to Manila take about six steps, with only one step utilizing blockchain. Pre-funded agent accounts decentralize operating capital, and tokenized dollars can be concentrated in a single fund pool, settling on Sundays and rebalancing within minutes. Traders hold inventory and bear exchange rate risks. Félix Pago raised $200 million for remittances from the U.S. to Latin America via WhatsApp, with a16z leading a $87 million equity round and General Catalyst providing a $113 million credit line. Nium is currently funding customer payments with USDC, with a16z Crypto leading a $10 million investment in Better Money. Conduit raised $36 million for corridors from Europe to Nigeria and Kenya, while Palla raised $14.5 million for white-label payments to thirty banks. The article states that while stablecoins can fix pipeline issues, they cannot resolve isolated systems related to legal matters or transaction fees.

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