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Blockchain can revolutionize

cross-border payments in 2024

countries reached an estimated $669 billion, a rise of 3.8
percent from 2022, according to the World Bank. Contrary
to expectations, remittance flows in Europe and Central
Asia experienced a 1.4 percent dip in 2023 following an 18
percent surge in 2022, the World Bank found, noting that
factors contributing to this include the conflict in Ukraine
disrupting remittances from Russia, and economic con-
traction in key destination countries like Germany and
the UK. Despite the decline, countries like Poland and
Ukraine are still receiving substantial inflows, the World
Bank affirmed.
Researchers also noted that South Asia exhibited the
strongest remittance inflow growth of 3.8 percent in 2023,
By Carlos Ordonez fueled by a surge in remittances to India, projected to
Clear Junction reach $125 billion in 2023. Meanwhile, Latin America and
the Caribbean experienced an 8 percent rise. As one of the
his year presents a pivotal moment for cross- largest remittance-receiving regions,
border payments, as I believe the time is right
to transform them through the power of block- According to the World Bank, LATAM's resilience can be
T chain technology. The good news is that global attributed to the strong labor market in the United States,
remittance flows continued their ascent in 2023, albeit at the primary source of remittances, coupled with a depre-
a slower pace, highlighting regional disparities and vul- ciating U.S. dollar, making it cost-effective for migrants to
nerability to economic pressures. The bad news is that send money back home. Countries like Mexico, Brazil and
the existing challenges that impede global remittance Colombia experienced significant growth, highlighting
flows—high fees, slow settlement times—became even the vital role of remittances in their economies.
more challenging in 2023, with economic headwinds like
higher prices to contend with. The Middle East and Africa witnessed a 2.7 percent decline
in remittance inflows in 2023, the World Bank further not-
There's no doubt that remittances are a vital support that ed, making it the only region experiencing a downturn.
migrant workers provide for their recipient families back Contributing factors include an economic slowdown in
home. Remittance senders and recipients want speedy, se- Gulf Cooperation Council countries, political instability in
cure settlements at a fair price. some regions and depreciating currencies in several Afri-
can countries. Egypt, a major recipient, saw a particularly
Remittance businesses need technology and payment sharp decline due to economic challenges.
partners that can deliver the infrastructure, compliance
expertise and strategic foresight to make these services World Bank researchers anticipate a smaller rise in remit-
more accessible. But good intentions need practical action tances of around 3.1 percent compared to the previous
if they are to deliver what consumers and businesses need years, which is due to a slower pace of economic activity.
from cross-border payments. That's why blockchain is a But the main challenge of the industry in 2024 remains
game-changer—a technology that can tackle the challeng- unchanged from previous years: the high cost of cross-
es that plague traditional systems. border payments. The World Bank's database shows that
sending $200 across borders costs an average of 6.2 per-
Certain cross-border payments flows are shaping the cent, with banks remaining the most expensive channel
landscape. And shifts taking place in remittance destina- at 12.1 percent.
tions and volumes are what's fascinating about the latest How cross-border payments are being
World Bank Migration and Development briefs at https:// transformed through technology
bit.ly/43VNIya and https://bit.ly/3vOIZSp.
Sending money across borders can be slow, expensive, and
The changes in cross-border payment flows unclear. However, in response to the limitations faced by
In 2023, the United States continued to be the biggest traditional systems, blockchain technology emerges as a
transmitter, while the main countries receiving money pivotal innovation. It offers a new and efficient approach
were India, Mexico, China, the Philippines and Egypt. to international money transfers, and according to a recent
Overall, global remittance to low- and middle-income J.P. Morgan payments report (see https://bit.ly/49ujUtD)
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