According to a recent study, cryptocurrencies could be a “good alternative” to the current methods of settling financial transactions. This means that cryptocurrencies can be used to supplement traditional finance instruments.
According to a study by the International Association of Money Transfer Networks (IAMTN), cost-effective payments can be made instantly thanks to the blockchain technology that underpins cryptocurrencies since it eliminates the need for intermediaries such as banks.
The findings are supported by top industry figures who the IAMTN spoke with about cutting-edge technology that could improve cross-border payments.
According to the stakeholders, blockchain and cryptocurrencies have limitless potential for improving cross-border settlements.
According to the report, “The use of cryptocurrencies for the settlement of transactions can be a good alternative to traditional settlement processes. This is because of the possibility it allows to settle transactions instantly on a blockchain, without the need to go through the correspondent banking system, with its limited opening hours and long processing times. ”
According to IAMTN, blockchain technology should be researched because the number of correspondent banking relationships is decreasing while the number of cross-border payments is increasing.
The report also noted that despite the alleged benefits of using blockchain technology for payments, it is still unclear whether the technology’s application is better for remittances.
IAMTN stated that apart from blockchain, open APIs and artificial intelligence (AI) are critical technologies that can help improve international settlements.
The study urges governments to expedite the regulatory process in order to bring clarity to the industry.
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