Altcoins For Remittance

Cross-border transaction and remittance are two problems that the cryptocurrency industry has been trying to solve. For a very long time, cryptocurrency supporters have been bragging about crypto superiority compared to wire transfer and other traditional international bank transfers. Yes, what’s not to like about cryptocurrency? You can send money within minutes and everything can easily be verified with a public blockchain explorer. But which cryptocurrencies are trying to shake the banks’ status quo in the remittance industry? This article talks exactly about that. Let’s begin.

XRP

Yes, one of the frontrunners in the remittance space is definitely XRP and the company behind it, Ripple. In fact, it’s their main focus until today. Ripple’s main faces are Chris Larsen and Brad Garlinghouse - both with big connections to the corporate and banking world. Ripple has a product called RippleNet which tries to challenge the status quo of SWIFT for international bank transfers.

RippleNet utilizes XRP as a bridge currency. The idea here is to utilize fiat-to-crypto exchanges in different countries and automatically convert fiat to XRP and back to fiat. For example, if someone wants to send money from the US to Mexico, RippleNet’s partner in the US would automatically convert USD to XRP and send it to RippleNet’s another partner in Mexico. The Mexican partner would convert the XRP back to local fiat (MXN) as soon as it receives the XRP transfer.

This whole process will be much faster than SWIFT bank transfer where it will take 3-5 business days. Also, by using RippleNet, banks can save transfer fees. Another advantage is removing nostro and vostro accounts which are fundamental for standard international transfers (but will be less needed if the banks use RippleNet). If you are curious about XRP and Ripple, there’s an in-depth guide that talks about XRP. Check it out on this link.

XRP has more banking partners for remittance compared to other altcoins and it has attracted many different companies to analyze its movement across different states, such as the report by Flipside Crypto - which you can check here.

Stellar (XLM)

Another top altcoin with remittance as one of its main missions is Stellar (XLM). Yes, the same altcoin that was co-founded by Ripple’s co-founder, Jed McCaleb. XLM has very similar characteristics with XRP. For example, both of them require destination tags, especially when you try to deposit XRP or XLM to a crypto exchange. Both of them are also fast and have very cheap transaction fees.

In its early years, Stellar always claimed that their main use case was to "bank the unbanked population". However, ever since they had talks with IBM, it looks like people’s expectation around this coin has changed a lot. Nowadays, Stellar’s biggest hope is for IBM Blockchain World Wire to be adopted by the big banks.

Yep, IBM Blockchain World Wire is IBM-Stellar joint partnership effort to take on SWIFT and RippleNet. It utilizes a very similar concept to RippleNet (using cryptocurrency as bridge currency for international bank transfers). The big difference is that IBM Blockchain World Wire tries to seduce banks to issue their own CBDCs (Central Bank Digital Currencies) on Stellar Blockchain. By doing this, they give the banks more flexibility to use their own tokens as bridge currency instead of XLM.

NANO

Another top altcoin with very fast transaction speed is NANO. Not only that but NANO is also feeless. Yes, it means that NANO has zero transaction cost, which is its advantage over XRP and XLM. Technically, NANO is not even a "blockchain", because it’s blockless. NANO is a cryptocurrency that utilizes DAG mechanism (Directed Acyclic Graph).

Unlike many newer altcoins that were created in 2017 and beyond, NANO does not have any feature to create your own DApps or smart contracts. The core developers believe that NANO must focus on one thing and be extremely good at it. In other words, they want to be the best technology for sending money.

Even though their crypto transfer is very fast and feeless, NANO does not have much branding and marketing efforts. As a result, its efforts to win the remittance battle have been falling behind Stellar and Ripple.

Conclusion

As of now, XRP, XLM, and NANO are the types of altcoins that you might want to look at for remittance. Of course, it does not mean Bitcoin, Ethereum, and other cryptocurrencies cannot be used for remittance and cross-border transactions. They absolutely can, but on a massive scale, for remittance it’s better to utilize a very fast cryptocurrency with almost non-existent transaction fees.

Price volatility remains a big issue in crypto space and thus users who send money abroad need to make sure the recipients can easily receive money in local currencies without much loss in value and time.