Sending money abroad is no longer an infrequent and unusual transaction. The globalization of businesses and restructuring of the office working system have contributed to the more dynamic international money movement. The need to send and receive money internationally has exponentially increased and has become an everyday occurrence. Buyers sending payments to suppliers, employers paying international freelancers, travelers booking accommodations and services across the world.
While the traditional ways of money transfer are still in place, it has proven to be too expensive, time-consuming and inconvenient for today’s use.
To accommodate the change, new and more dynamic international money transfer channels were developed. In terms of money transfers, cash as we see it is no longer king.
Another Look at the Value of Money
Money is the simplified medium of exchange we use for our transactions – to pay bills and services, buy food, or acquire properties. It is usually represented by the coins and banknotes released by the government. However, it can also be in the form of bills, bonds, and other financial instruments of value. Monetary value can also be assigned to assets, properties, and even services. Thus, you can pay with your services or with an asset of value in exchange for services or goods that you need. Therefore, money can be anything we put value into.
Minting of the Bitcoin
Bitcoin is a digital currency and an electronic payment system that is independent of any third-party authority such as banks, clearing, or trading houses. Bitcoin currencies are created, held, and used online. A bitcoin is created or mined in a Bitcoin app, stored in digital wallets or mobile devices, and used to purchase goods, trade, or exchange for conventional money like dollars or euros. Bitcoin is decentralized – no central authority has significant control over it. Control is collective on all the players or the entities that mine and/or process transactions independently. The minting of Bitcoin gave us a new form of money – the cryptocurrency.
Bitcoin and all cryptocurrencies use blockchain. Blockchain is a decentralized electronic digital transaction logging system shared by all the users of the ledger, wherein all entered transactions can be seen by anyone. It is a secure digital public ledger of all completed transactions. A blockchain is made up of nodes, or the machines and computers that validate and relay transactions. Each transaction entered and completed is automatically updated in the ledger. It is continuously growing as transactions or blocks are recorded and added to it. Transactions are not limited to monetary transfers, they can also be in the form of property, goods, services, or votes – anything with value. The blockchain technology provides the authenticity of transactions, users, and transparency of the system, which significantly reduces fraud and other irregularities.
A New Wave of International Money Transfers
The financial technological trends and developments are strongly pointing towards a move away from the banks. The presented advantages of virtual currencies and non-bank money transfers are quickly recognized and embraced by the more advanced thinking organizations. Lower costs, faster transfers, and no-fuss processing are gaining the new wave of cashless money transfers support and followers. But the new way also presents a huge disruption in the established financial systems, thus the strong opposition from the banks.
Anything new is always faced with opposition, most expectedly from the incumbents. Some of the obstructions and challenges might be too strong that it will destroy and eliminate the newbie, some will be weak, while others will effectively fuel its growth and strength. The fintech, most specifically, the virtual currency industry has faced strong and sustained opposition from the established brick and mortar banking and financial systems.
But when the new entrant is timely, relevant, and offers endless possibilities, no amount of opposition will put it down.
Today is the age of digital tools, instantaneous solutions, and virtual sphere. While the more traditional and established ways of international money transfers are still in place and operational, the changing needs also require more relevant solutions. Cryptocurrencies and blockchain take advantage of the latest available resources to perfectly fit into the system and address today’s global business money transfer needs.