The study by the International Association of Money Transfer Networks (IAMTN) stated that through the blockchain technology that powers cryptocurrencies, remittances can be instant due to the ability to eliminate intermediaries like banks and in turn lower costs. Notably, the findings are backed by leading industry players who IAMTN interviewed on the innovative technologies with the potential to improve cross-border payments. Interestingly, the stakeholders noted that blockchain and crypto possess ‘infinite opportunities’ to enhance cross-border settlement.
Drivers for blockchain in payments
In particular, IAMTN stated that the need to explore blockchain technology is necessitated by the drop in correspondent banking relationships alongside the surging cross-border payment volumes. The study further observed that despite the touted benefits of blockchain in payments, it is still unclear which is the best use case for the technology that can be used in remittance. Besides blockchain, IAMTN identified open application programming interface (API) and artificial intelligence (AI) as key technologies that can enhance international settlements.
Regulatory barrier
It’s also worth mentioning that the report also acknowledged that industry players are attempting to implement blockchain into their systems but have encountered various challenges, with regulations ranking top. According to the study, in some regions, rigid laws exist, but others lack clear guidelines to govern the integration of new technologies leading to uncertainty. Other challenges include a lack of accessibility, awareness, literacy, and trust in new technologies with the report calling on policymakers to fast-track the regulatory process to ensure clarity in the space.
