Mastercard's white paper on remittances in Latin America highlights the region's growing remittance rates and the transition from cash to digital options fueled by mobile phone and internet penetration. The report identifies blockchain and cryptocurrency as key components in the evolving remittance ecosystem, with companies like MoneyGram, Stellar, SBI Remit, Ripple, Binance, and Mastercard partnering to facilitate digital remittances. However, trust, regulatory, and technological adoption issues continue to hinder progress in the crypto field, emphasizing the need for comprehensive digitization efforts and intelligent partnerships among diverse players in the remittance space.
Mastercard's white paper on remittances in Latin America underscores the region's growing remittance rates and the transition from cash to digital options driven by increasing mobile phone and internet penetration. The report emphasizes the role of blockchain and cryptocurrency in shaping the evolving remittance ecosystem.
As of 2022, remittance rates in Latin America are growing faster than the global average, reaching $831 billion in total. Despite the average cost of sending remittances to the region being slightly lower than the global average, competition is intensifying, leading to price pressures and informal remittance channels.
The report highlights the emergence of digital remittance options, with Latin America receiving 43% of its remittances digitally, a figure expected to grow to $20 billion by 2026. Companies like MoneyGram, Stellar, SBI Remit, Ripple, Binance, and Mastercard are leveraging blockchain and cryptocurrency, such as USDC, to facilitate faster and more efficient cross-border payments.
However, challenges persist in the crypto field, including trust, regulatory, and technological adoption issues. While digitization efforts are advancing, the report stresses the importance of fostering digital money ecosystems in recipient countries to enable broader digital payment capabilities beyond remittance transactions.
To address these challenges and capitalize on the opportunities presented by blockchain and crypto, the report emphasizes the need for intelligent partnerships among diverse players in the remittance space. By collaboratively leveraging technology and expertise, remittance providers can enhance efficiency, reduce costs, and improve financial inclusion in Latin America.
(DEREK ANDERSEN, COINTELEGRAPH, 2024)