Annually, consumers in the United States who send international bank transfers pay more than $12 billion in remittance fees alone.
The overwhelming majority of United States remittance fees for international remittances would not apply to similar cryptocurrency transactions, according to a recent blog post from cryptocurrency exchange Coinbase.
According to the research conducted by the exchange, the US average fee rate of 6.18 percent indicates that Americans spend close to $12 billion annually on remittance fees. The post continues by stating that the average transaction time for such remittances is between one and ten days, whereas comparable cryptocurrency transactions typically take about ten minutes.
Remittance payments represent something of a “double whammy” for international transactions, as they typically incur both a sending charge and a currency conversion fee.
However, cryptocurrency transactions are typically significantly cheaper. According to Coinbase, the average Bitcoin transaction charge is $1.50, while the average Ether transaction fee is $0.75.
Although the report lacks the rigor of a scientific study, it does shed light on some of the challenges encountered by the more than 1 billion people who rely on remittances and how the global adoption of cryptocurrencies could alter the financial landscape.
Approximately 6% of U.S. adults are estimated to presently hold some form of cryptocurrency, with adoption rates continuing to rise since at least 2019 — except two-quarters of the decline at the end of 2022. If these rates increase or remain unchanged, a gradual migration from traditional remittances to cryptocurrency-based international transactions could eventually disrupt how the global financial industry handles associated fees.
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Disclaimer: The information provided in this article is for informational purposes only and should not be construed as financial or investment advice. Cryptocurrency investments are subject to market risks, and individuals should seek professional advice before making any investment decisions.
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