crypto cross border payments

Crypto Cross Border Payments-Is It The Future?

What are certain inefficiencies that can be eliminated in Crypto cross-border payments?

Is Crypto Cross-Border Payments Transaction Cheaper?

Sending money across countries is often with remittance payments by people working in foreign countries and sending money back home.

This makes the least costly method of sending money home the most appealing.

In 2020, the World Bank estimated that remittance payments sent through traditional fiat banks are charged an average fee of 6.75%, a significant amount for sending money to another country.

While it’s decreased from the whopping 9.75% average fee charged back in 2009, cryptocurrencies payment fees are more appealing as on-ramp platforms charge significantly less than traditional banks.

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How do Crypto Cross-Border Payments work?

First, cryptocurrencies replace centralized authorities with a network of nodes that verify transactions.

Public blockchains and their native cryptos are global by nature. And built to be secure,censorship resistant, with fewer transaction fees.

Crypto cross-border payments follow a fairly straightforward process.

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How does it work?

There are several different wallets to choose from and setting up an accounts is extremely easy.

For example, if you live in spain and wish to send money to a friend in Australia ,the first step would be to find an ‘on-ramp’ service provider.

There are several such providers ,and their job is to take your fiat currency and provide you with an equivalent amount of crypto.

You can complete this transaction using your credit card or through a bank transfer. This cryptocurrency is getting stored in a secured crypto wallet.

Next Step

The next step would be to obtain your friend’s wallet address. Once you have this address, just send the required amount,and your friend should receive the crypto in no time.

They can then convert the crypto into fiat currency thereby completing the transaction.

Simple right? Now let’s look at the traditional method of money transfers.

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Crypto Cross-border Payments transaction through Banks

Traditionally International transactions have carried out through a network of banks and a global messaging system called SWIFT.

SWIFT is short for Society for worldwide Interbank Financial Telecommunication’.

It is a framework that redirects transactions through various banks using a coded messaging system.

Currently,the SWIFT system has over 11,000 banks and financial institutions. Almost sending out over 42 million messages every day to successfully complete cross-border transactions.


As you can summarize,this system of redirections and messages can get a little complicated.

It might bloat a simple transaction into various branches and detours ,whereas it should be a simple peer-to-peer transfer.

Disadvantages of SWIFT

SWIFT caused a lot of delays. Transactions take days to complete. As there are various steps to reach from the point of origin to the final recipient.

Moreover,according to CoinTelegraph ,the current system incurs an average fee of 6.75% per transaction.

Also, playing by the rules of a centralized authority like a bank creates inefficiencies like being able to make payments only during banking hours.

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Present Scenario with SWIFT

Currently, 19 countries along with the European Union adhere to the SWIFT system and guidelines.

If you want to make transactions to countries that are not a part of SWIFT, it takes even longer for the transaction to be settled.

And the fees attached to a transaction can be exuberant,going up to 5-10 %.

Conversely, this system has been most beneficial to banks that have ranked in trillions through fees. Just because of the liquidity they provide.

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The necessity of off-ramps and on-ramps in Crypto Cross -Border Payment transaction.

A particular problem with cryptos is that they are very volatile.

Their prices shoot up and down in a matter of hours, sometimes even seconds. This might not be desirable for some individuals ,merchants or businesses looking for cross-border payment services.

To accomodate this gap ,crypto cross-border transaction systems utilize various on-ramp and off-ramp methods that convert fiat to crypto and crypto to fiat.

Fiat-backed Stablecoins

These have become one of the most popular on-and-off ramps solutions. Being pegged against the dollar ,they ensure relatively easy access to crypto without having to convert money into fiat immediately.

They cut out the transactional headaches for a customer ,like tax conversion and high volatility in cryptos.

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Are Cross-Border payments using CBDC a good idea?

  • The IMF is looking at cross-border payments using CBDC (World Bank/Flickr). New platforms for cross-border central bank digital currencies (CBDCs) could be more efficient and safe.
  • While still ensuring countries can impose compliance checks and capital controls, an official from the International Monetary Fund said on Monday.

Institutional Adaptation

Seeing the potential and rising popularity of cryptos ,several companies and institutions have finally begun to include digital assets in their business models.

One particular application that many companies have honed on is the cross-border transaction capabilities of crypto and blockchain.

Major companies ,including Microsoft,Tesla,Expedia,and WeWork,started accepting payments in cryptos in 2021.

Payment Giants

Visa and Mastercard have rolled out support for cryptos on their networks,giving you access to their crypto portfolios and the ability to convert them quickly and cheaply into traditional currencies.

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Ripple (XRP)

Ripple, the organization behind the crypto XRP ,have been focused on bringing instant and reliable international transactions to multiple financial institutions using blockchain technology.

They are working with many players in international transaction space and have diverted their focus towards Asia. Which they see as a critical growth market.

The Challenges Of Cryptocurrencies For Global Payments

While cryptocurrencies offer numerous benefits over traditional financial systems, there are still a few hurdles to overcome before we see wider adoption in the industry.

Read More

The complexity of crypto

Cryptocurrency is seen widely as a complicated industry, with many perceiving it as technical and difficult to understand.

As more are given insight into how to use cryptocurrencies (something that are being taught through smart phones).

And as more users start taking advantage of the technology, we will likely see a spike in the uptake of crypto payments.

Read More

Gas and transaction fees

Scalability on some platforms, especially decentralised exchanges and protocols with little liquidity, leads to rising fees for transfers.

This is especially so in times of increased demand, with Ethereum users particularly suffering with high gas fees.

More cryptocurrencies are looking to resolve issues of scalability as well as platforms that facilitate payments.


Cryptocurrency payments – both to send and to receive – rely on countries that are not averse to the crypto industry.

With more countries looking to regulate the space, we’re likely going to see more legislation that will help facilitate crypto payments, but this is still emerging across the globe.

Read More

How Blockchain Technology is a Game changer for Crypto Cross-Border Payments?

Blockchain, or distributed ledger technology ,is a game – changer move in cross-border payment transactions.

The term, ‘cross-border payments’ refers to transactions across different countries. Cross-border payments often become difficult because of exorbitant fees and long processing time.

Use of blockchain in cross-border payments will make the entire process simpler and also boost the global economy.

With encrypted technology, payments become faster. Currently, many block-based payment platforms exist and many more will appear in the coming days.

Why Blockchain is important?

First, immutability is not compromised in blockchain. Here,the central authority is replacing a decentralized network. A group of nodes validates the monetary transaction.

Second, in a blockchain network, a transaction getting complete in real time due to fewer negotiations.

Many public blockchains can transfer money across the world.

Finally, blockchain supports transparency and traceability.It solves the pain points of different industries. Basically, all transactions are fast and with a minimum fee.

How Blockchain Works in Crypto cross border payments?

The key transaction parts are the gateways and the customer with no banking institution in between.

A person can send money anywhere using an on-ramp service provider. The provider converts the fiat money into cryptocurrency which can be kept in any crypto wallet.

One can choose a crypto and open an account and then initiate a transfer from a bank or credit card.

Lastly,one needs a receiver’s wallet address to send the amount. Once the crypto reaches the receiver’s wallet ,he/she can convert it into fiat money.

Read More


Mainstream financial companies have also started using blockchain to pilot transactions.

The technology on the upper layer remains the same. But a little tweak in the core makes it work on blockchain.

There is not much clarity regarding regulations in crypto market. Fintech giants such as Wise or SWIFT ,are currently hesitant to use blockchain or distributed ledger technology.

They will deploy blockchain networks when more central banks adopt it for cross-border payments.

Read More


The need for an efficient cross-border transaction system is heightened as the World becomes more globalized.

And cryptos seem to be the perfect solution. While banks can start to lower transaction fees in an effort to compete with crypto transaction systems.

The immutability and security that a blockchain provides are better than traditional banks.

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What is a cross-border payment?

These payments are financial transactions where the payer and the recipient are based in seperate countries.They cover both wholesale and retail payments ,including remittances.

Cross-border payments are using which crypto?

The Stellar network uses its own crypto ,called Lumens(XLM), as a bridge currency to facilitate cross-border transactions.This eliminates the need for intermediaries ,such as banks or centralized exchanges.

How blockchain is transforming cross-border payments?

Blockchain-based cross -border payments eliminate the need for intermediaries and associated fees. Thereby, resulting in significant cost savings for businesses and individuals.

Payment is accepted in which crypto?

Bitcoin is the most commonly supported crypto during transactions with these systems. But some gateways provide the ability to pay with alternative cryptos,such as Ether, Litecoin,and Bitcoin Cash,among others.

Which countries accept crypto as payment?

El Salvador, The Central African Republic, The United States, The European Union, Canada, Israel





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