IAMTN Research: "Cryptocurrencies are a good alternative to traditional payment systems"
Cryptocurrencies can be a good alternative to traditional payment systems, as they are based on blockchain technology, which allows transactions to be completed instantly without the participation of intermediaries, according to a report by the International Association of Money Transfer Networks (IAMTN). According to the study, some players in the cross-border money transfer industry perceive blockchain and cryptocurrencies as technologies that can improve money transfer processes. Cryptocurrencies Eliminate Costly Practices for Money Transfer Providers
Using cryptocurrencies to settle transactions can be a useful "alternative to traditional settlement processes," according to the latest report of the International Association of Money Transfer Networks (IAMTN). According to the report, this is due to the fact that in blockchain, the technology underlying cryptocurrencies, transactions are carried out instantly, without the need to go through intermediaries such as correspondent banks.
The combination of the deterioration of correspondent banking relations and the growing volume of cross-border transactions further underlines the importance of blockchain not only to reduce the cost of transferring funds, but also to significantly accelerate the transfer of money across borders.
"International transactions can be completed almost instantly, which eliminates the need for pre-replenishment of accounts in recipient countries, which is an expensive practice for money transfer providers. A number of enterprises, from traditional money transfer service providers to cryptocurrency fintechs, use blockchain technology to improve money transfer processes," the report explains.
To support this statement, the report includes the results of the IAMTN study, which examined the opinions of industry participants about innovative technologies that can improve the process of sending funds between different countries. As the results show, both blockchain and cryptocurrencies are seen as innovations that "open up an infinite number of opportunities in the field of cross-border payments."
An open application programming interface (API) and artificial intelligence (AI) are two other technologies that are believed to be able to improve the process of money transfers, the IAMTN study showed. In addition to revolutionizing the financial industry, many of these new technologies can "permanently improve the infrastructure of cross-border payments for the benefit of end users."
Regulatory uncertainty slows down the introduction of new technologies
However, the report says that money transfer service providers who seek to integrate new technologies into their business processes often face problems in the form of strict national restrictions or the absence of any laws regulating such technologies. According to IAMTN, the fact that only a few countries regulate the use of blockchain creates "some level of uncertainty for businesses that use or would like to use this technology."
The report also states that barriers such as accessibility, lack of awareness, literacy and trust often work against new technologies or make them unattractive, even if their use leads to significant savings. Therefore, in order to overcome some of these problems, IAMTN encourages politicians to adapt their decisions to these realities.
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