Fall in Bitcoin price will not impact inward remittances
To date, stablecoins represent the most-used currency with regard to remittances
Mumbai: The recent 17 per cent fall in the price of Bitcoin will not have any impact on the remittance of money through the crypto currency in the country, feel the experts.
Even as the crypto currency has witnessed price correction, it will not have its impact on the remittances. Citing the reason, Sathvik Vishwanath, CEO & Co-Founder of Unocoin told Bizz Buzz that buying and selling happens simultaneously. As a result, volatility in crypto currency is zero. To date, stablecoins represent the most-used currency with regard to remittances.
According o a McKinsey report, cross-border transactions represent 20 per cent of total transaction volumes in the payment's industry, yet they generate 50 per cent of its transaction-related revenues. With popular stablecoins like DAI and USDT supported by the crypto domain, users have the ability to send and receive stablecoins across borders at a fraction of the current cost. In 2020, remittances fell sharply by roughly 28 per cent due to the effect of the coronavirus pandemic.
Why did the remittance fall?
Well, migrants from USA & Middle East countries are the largest contributor to Indian Remittance inflows.
Since pandemic, remittance has come down due to lockdown and lack of work for informal working sector in construction and industry. In Nigeria, cryptocurrency prices are 20-30 per cent higher than the international market.
"But in India, we have not seen such price movement despite increasing demand in last few years. In US and Middle East cryptocurrency are legal and possibility of migrants relying on crypto for remittance needs to be overlooked. Impact of crypto on remittance inflows and India Dollar system need to studied by government," says Gaurav Mehta, Founder, National Digital Asset Exchange (NDAX).