Since its inception in 2008-09, cryptocurrencies have been used for making international payments. Of late, it is being used excessively by merchants, business enterprises and investors for paying for goods and services being bought, both online and offline. As the world is happily embracing cryptocurrency, and accepting it as an alternative to regular currency payment, it’s proving to be a cost-effective and lucrative way to transact. So, let’s understand what the advantages of cryptocurrency are in international trade, especially when it comes to making cross-border payments on a big scale and in a regular way.
- Quick & Efficient Transactions – The biggest advantage of using digital currencies (Cryptos) like Bitcoin (BTC), Ethereum (ETC) or USDT Tether (Stablecoin) for making cross-border payments is the lightning speed with which transactions are carried out. Unlike traditional mechanisms of payments like credit card, cheque or draft, which may take several days to process, crypto cross-border payment is typically completed within a few minutes. And, when you’ve gateways and processors like “UniPayment”, the whole process becomes exceptionally seamless, effortless and fast.
- Reduced Transaction Fees – Another significant benefit of using cryptocurrency like Bitcoin for transaction and payment is the key aspect of lower transaction fees, unlike conventional form of payments, as discussed earlier. In the case of the traditional banking system, any cross-border crypto payment involving federal or government listed banks and financial institutions would require merchants to pay transaction fees at every step. But with cryptocurrencies, the issue of intermediary fees are done away with, thereby reducing costs for international payments.
- Financial Inclusion – A potent and popular cryptocurrency like Bitcoin (BTC) has the ability to improve upon the core aspect of financial inclusion, by the way of encouraging customers to to pay with crypto, thereby automatically bolstering international trade and finance. Top-rated digital currencies like BTC & ETH provides all individuals and traders with the option of participating in international transactions, without the need for an account in intermediaries like banks, or any other financial institutions. You only require a crypto wallet or a digital wallet, which can be easily created, and operated via an Android device like a smartphone.
- Privacy, Security and Transparency – All types of cryptocurrency transactions are secured via cryptographic codes on a Blockchain technology. This helps in preventing frauds, malpractices, phishing attacks and hacking by unwanted agents. Moreover, this blockchain, which supports all cryptocurrency transactions, ensures 100% transparency and privacy, as every single transaction is recorded on a public ledger system. It also provides the element of anonymity, without revealing any physical address, name or any other information of the user. This heightened level of transparency helps put a check on corruption and enhance trust factor among customers that want to take this cryptocurrency advantage when making cross-border payments.
- Freedom from Conventional Banking System – As cryptocurrencies operate independently, unlike traditional banking systems, and are NOT subject to any federal rules, laws & regulations, it is free from the shackles of outside control. This freedom can prove beneficial in certain areas and scenarios where conventional banking services may be restricted or little available to the common masses, like in underdeveloped nations and societies. Therefore, cryptocurrency payments provide citizens with an alternative form, when settling international pay-offs.
- Reducing Currency Risks – All cryptocurrencies like BTC, ETH, USDT Tether, DOGE, LTC, SOL, ADA, etc. provide a hedge against the risks associated with cross-border transactions, when performed with crypto. The high volatility factor in fiat money can result in significant fluctuations in the overall value of a transaction. As cryptocurrencies are decentralized and have a limited supply, it ensures a stable value, thus minimizing the impact of currency fluctuations and volatility, which is quite evident in international transactions.
How Cryptocurrency Facilitates Cross-Border Pay Offs
- Peer-to-Peer Transactions – A popular digital currency like Bitcoin allows merchants to send and receive funds globally in a direct way, without the need for an intermediary like a bank. This peer-to-peer aspect of crypto transactions helps in streamlining cross-border payments, thus completely eliminating the need for a federally approved financial institution to facilitate the money transfer.
- Cryptocurrency Beyond Boundaries – As cryptocurrencies operate on a global scale, it is not bound by geographic borders, as set by different governments. This borderless nature makes it a perfect mode of international payment, as digital money can be sent to recipients in different nations, without any complex mechanism or procedure.
- Secured by Cryptographic Codes – As all crypto transactions employ advanced cryptographic codes, this automatically ensures privacy and security of all digital transactions on blockchain. This makes it extremely secure and resistant to hacking, phishing, frauds and thefts, which provide merchants with peace of mind, while performing cross-border crypto transactions and payments.
- Blockchain Technology & Decentralization – The decentralized nature of popular currencies like Bitcoin (BTC), which is supported by blockchain technology, ensures that no particular single entity has control over the payment network. This critical aspect of decentralization helps enhance security, privacy and reliability in international wire transfers and payments, as there’s no central point, which may fail. This is how crypto traders are able to send and receive funds via digital wallets, without any fear of theft or transaction fees.
End Note
Crypto payments has the potential to revolutionize cross-border or international trade, especially when it comes to making payments faster, easier, efficiently and in a secure manner. Moreover, one cannot ignore the aspect of financial inclusion in masses in emerging economies of the world, and the key feature of decentralization that makes it an attractive option for trading, transacting and making global payments. However, with such financial innovation and freedom, comes challenges like volatility and regulatory considerations, which needs to be addressed in a professional way. But, as this cryptocurrency ecosystem is steadily evolving and finding acceptance among new areas and users, it can be said that the future of international trade is bright. In fact, the advantages of using cryptocurrency are going to increase in the years to come. So, if you’re looking for a cost-effective and reliable way to make global payments, the answer lies in blockchain technology and crypto.
