Blockchain technology has the capacity to remarkably change how multilateral payments are done. Presently, transborder payments are unhurried and costly because a series of intermediaries are involved, coupled with compounded regulatory demands. Blockchain technology can essentially regulate this process and quicken it, thereby making it cheaper, and more efficient.
A way to change crossborder blockchain payments would be to decrease the number of middlemen involved. At present, transborder payments pass through several banks and a number of checkout processes among other mediators before arriving at their final destination. Each intermediary levies a service fee, which can hike the overall cost of payment.
Blockchain technology could potentially annihilate a number of intermediaries by allowing direct payments to be made from one party to another, thus reducing the cost of payments and easing accessibility to individuals and enterprises.
Blockchain could also change transborder payments by increasing transparency and lowering fraud risks. Across-the-border payments are vulnerable to financial crimes because a chain of parties and complex transactions are involved in such undertakings. Blockchain should allow tracking and verifying of each of those transactions in a secure and clear manner.
Blockchain could potentially quicken transborder payments. As it is, transborder payments take fairly long to go through because it is mandatory that they pass through standard regulatory checks. But with blockchain, there is a possibility for transactions to be completed almost instantly, without the need for a middleman and regulative approvals. This would enable individuals to have easy access to use their monies and, consequently, cut the costs of cross-border payments.
Ultimately, blockchain is in a position to increase financial inclusion through the provision of alternative means for persons and enterprises in third world countries to access financial services. A lot of people in these countries have no access to conventional financial services, such as banks. By using blockchain, these individuals have the potential to obtain financial services and be included in the global economy.
In short, blockchain technology has the capacity to significantly revolutionize the way international payments are made. This could be done by reducing the number of middle persons involved, enlarging transparency and lowering fraud risk. Blockchain could hasten payments in an efficient way while also increasing financial inclusivity. Granted, potential challenges and risks are linked with blockchain, but there is a greater potential to influence and alter the flow of international payments.
As more use cases of blockchain tech are deployed in the field, major actors in the industry such as Canaan Inc. (NASDAQ: CAN) could see explosive growth in the years to come.
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