Can Crypto Help Save Money?

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The crypto craze isn’t limited to the Old West. He also took control of India.

And why not. When superstars like Salman Bhai and Big B promote cryptos and NFTs, people are bound to be influenced. Currently over 1.5 crore Indians have crypto assets worth Rs. 15,000 crore! While most of these investments are motivated by greed to land a jackpot, some people have found another use for crypto. Expats, or people who live outside of their home country, use it to save money. Yes. Truly.

Another use for crypto

Many expats regularly send money home. But sending money to another country is usually a costly affair. According to a World Bank report, transferring $ 200 can cost you between 5% and 9.3% fees. Are you wondering why these charges are so high?

Because money transfer companies like Western Union have to follow many rules like Know Your Customer (KYC) and Anti-Money Laundering (AML) to make sure you don’t transfer money illegally. But that makes the process expensive and time consuming.

Now no one likes to lose money. And for expats in particular, these transactions can quickly add up and cost them a small fortune. And this is where the crypto stepped in to disrupt the $ 540 billion remittance industry.

The need for crypto

Cryptocurrencies, which are decentralized, do not need to be transferred through traditional exchange offices. You can either transfer money directly to someone’s crypto wallet or give them access to yours. Easy peasy. Many other cryptocurrency transfer services like Paxful, Satoshi Citadel, and Bitso have also popped up recently, making crypto transfers much easier.

Crypto transactions also take place much faster than traditional money transfers, which can often take 1-5 business days to process.

If it was that easy, why haven’t we always used crypto for money transfers?

While crypto has been around for a while now, its popularity has exploded in recent times. With increasing popularity, more and more solutions have developed. And the pandemic has further accelerated the process.

Now, many crypto-skeptics must be wondering what difference crypto transactions can actually make? Well if you ask the President of El Salvador the answer will be $ 400 million! The country recently adopted Bitcoin as legal tender, and its president has said that remittances are one of the main reasons for this move. Remittances and money transfers account for 23% of El Salvador’s GDP, and by adopting Bitcoin, the country could save up to $ 400 million in commissions every year!

So, are crypto transfers absolutely free? Unfortunately no. Nothing in life is free (except maybe unwanted advice). You have to pay a fee for the crypto miners to accept your transaction and move it forward. But it is not that simple. These fees will depend on the size of your transaction and network congestion. Wait, what does that mean?

You know how when you send a courier the courier service charges you based on the size of the package? The same principle applies here. The more Bitcoin you send, the higher the transaction fees. Also, sometimes the courier may contain too many packages. So, they tell you that your package will be delivered after 10 days. But you want your package to arrive in 2 days then you choose the fast delivery option. Again with cryptos, the faster you want your transaction to be completed, the higher the fees. One thing you need to keep in mind is that crypto prices are very volatile. So, if you choose a longer delivery time, there is a good chance that the price of the crypto you are sending could go up or down.

The best crypto for remittances

Like in El Salvador, most people’s first crypto choice seems to be Bitcoin. And why not, it’s the OG (original) crypto, widely accepted and trusted. It is also one of the few cryptos that you can use to make payments. But this popularity is what has made Bitcoin transactions super expensive now. The average fee for a Bitcoin transaction is currently $ 24- $ 31. But if you can’t afford it or just don’t want to spend that much money, you can go for several other cryptos that are not only cheaper than Bitcoin but also faster. In fact, some cryptos like Ripple were created for the purpose of sending money.

Here are some popular cryptos and their transaction fees:

Indians currently receive around billions of dollars through crypto remittances. But with the government’s crackdown on crypto, will this industry survive?

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