The rise of the internet made the world feel like a smaller place. Economic globalization allows companies to source talent in all parts of the world, giving billions of people the opportunity to participate in a connected economy for the first time. The blockchain technology provides a global network for cheap and fast transfer of digital assets, built on top of the internet. Creating new ways to earn money and allowing people to be part of a global financial system, without needing a bank account. Are we witnessing the emergence of a new economy?
Global payments are being disrupted before our eyes
Today's banking system is built upon the Bretton Woods Agreement from 1944. In the post-war period, fast and reliable payments between the countries of the “western world” were a top priority. Following this idea, the Bretton Woods system of monetary management established the rules for commercial and financial relations among the United States, Canada, Western European countries, Australia, and Japan. It was a big improvement over the gold-backed monetary system, which was too slow and inefficient for sending money between continents. The fiat monetary system with the US-Dollar as a global reserve currency offered a much faster and cheaper way to send money and trade goods globally.
Nearly 80 years later, we find ourselves in a world, where an emerging work force wants to transact with one another, not just in Europe and northern America, but in all parts of the world. The Bretton Woods system was never designed to handle these kinds of payments, and it shows.
Sending payments should be as easy as sending a text message
Paying a developer in India from a German bank account is usually painful and expensive. An Indian bank does not offer IBAN wire transfers and with the SWIFT system there is a lot of paperwork to do. Payments take days to settle and cost $20 or more, plus a conversion fee that is proportional to the amount sent. The best practice is to use a third party payment system from one of the global fintechs and go through the lengthy KYC process. For payments of more than $1,000 oftentimes the amount gets frozen, and a questionnaire is sent to the recipient of the money. The recipient must justify, why he is getting paid this salary and ultimately relies on the mercy of the authorities to receive his hard-earned income.
Continue reading: https://www.forbes.com/sites/philippsandner/2022/08/31/three-ways-how-blockchain-technology-is-already-changing-the-lives-of-thousands-of-workers-in-emerging-countries/?sh=24237c424f3f
Global payments are being disrupted before our eyes
Today's banking system is built upon the Bretton Woods Agreement from 1944. In the post-war period, fast and reliable payments between the countries of the “western world” were a top priority. Following this idea, the Bretton Woods system of monetary management established the rules for commercial and financial relations among the United States, Canada, Western European countries, Australia, and Japan. It was a big improvement over the gold-backed monetary system, which was too slow and inefficient for sending money between continents. The fiat monetary system with the US-Dollar as a global reserve currency offered a much faster and cheaper way to send money and trade goods globally.
Nearly 80 years later, we find ourselves in a world, where an emerging work force wants to transact with one another, not just in Europe and northern America, but in all parts of the world. The Bretton Woods system was never designed to handle these kinds of payments, and it shows.
Sending payments should be as easy as sending a text message
Paying a developer in India from a German bank account is usually painful and expensive. An Indian bank does not offer IBAN wire transfers and with the SWIFT system there is a lot of paperwork to do. Payments take days to settle and cost $20 or more, plus a conversion fee that is proportional to the amount sent. The best practice is to use a third party payment system from one of the global fintechs and go through the lengthy KYC process. For payments of more than $1,000 oftentimes the amount gets frozen, and a questionnaire is sent to the recipient of the money. The recipient must justify, why he is getting paid this salary and ultimately relies on the mercy of the authorities to receive his hard-earned income.
Continue reading: https://www.forbes.com/sites/philippsandner/2022/08/31/three-ways-how-blockchain-technology-is-already-changing-the-lives-of-thousands-of-workers-in-emerging-countries/?sh=24237c424f3f
