NEWSROOM

Blockchain-based cryptocurrencies have been adopted in recent years not only as an investment vehicle but also as a means of payment. It has been determined that blockchain technology can save financial institutions $27 billion by 2030 in international payment and remittance processes.

TURKEY — With the Russia-Ukraine war, the understanding that global banking infrastructures could change and be restrictive according to geopolitical balances brought along the search for alternatives in international money transfer and payment processes. As this is the case, the eyes turned to cryptocurrencies and blockchain technology, which is the most talked about financial instrument of recent years. While cryptocurrencies have been adopted not only as an investment tool but also as a payment tool in recent years, it has been started to talk that especially decentralized finance (DeFi) applications can play an important role in the future of international money transfer.

Haider Rafique, CMO of OKX, who shared his evaluations on the subject, said, “The announcement of the online payment system PayPal's stable cryptocurrency indexed to the US dollar in the recent days is one of the important developments in this regard. However, the fact that PayPal is banned in many markets, such as Turkey, where it is actively needed, limits the potential of the technology.

Financial institutions could save $27 billion by 2030

A study conducted by the Bank for International Settlements (BIS) in May 2022 showed that distributed ledger technology, which is also the basis of blockchain, will increase efficiency in international payments, while Juniper Research estimates that financial institutions can save $27 billion by 2030 in international money transfer transactions thanks to blockchain, they predicted. Stating that the redefinition of globalization, the acceleration of digitalization and the ability of businesses of all sizes to be able to sell all over the world have increased the need for international money transfers, Haider Rafique said, “Uninterrupted and fast international payments are becoming more critical for businesses and individuals every day. This need creates a remarkable opportunity for decentralized financial technologies that eliminate intermediaries and enable transparent, secure and fast transfer between individuals.”

Three out of 5 global companies use crypto for international payments

Noting that the use of crypto in international payments cannot be underestimated, Haider Rafique said, "A report by PYMNTS shows that three out of 5 global companies use crypto in global payments. However, as seen in the PayPal example, centralized structures continue to create a barrier to these transfers. Whereas self-hosted decentralized crypto "Money wallets and DeFi services are active in all markets. Millions of people use fiat-indexed stablecoins to transfer money through DeFi wallets."

“We make it possible to switch to Web3 Wallet with a single click”

Haider Rafique, CMO of OKX, pointed out that every system managed from centres in finance is shadowed by slow, non-transparent, long-lasting processes and high fees despite the risks of fraud, and concluded his evaluations with the following statements, “Transaction fees vary between 6% and 20% in international money transfers. The transfer cost of a global stablecoin is less than 0.1%. Different regions, different standards specific to countries and banks' internal policies in intercontinental transfers lengthen the processes. In international money transfers carried out with decentralized wallets, only one protocol is followed, no matter where in the world. All decentralized wallets run on common protocols and are developed with interoperability in mind. In this way, it offers the comfort, speed and confidence they seek for both businesses and individual users. We anticipate that in the next 5 to 10 years, decentralized applications and services will be used in more cross-border transactions than their centralized counterparts. As OKX, we enable the transition to Web Wallet on a single platform, with a single click, and enable digital asset owners to secure their assets, perform crypto swap transactions, and trade NFTs.