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World Bank study shows lower transfer costs in Q3 – only cryptocurrencies meet UN target – Finance Bitcoin News

The latest study by the World Bank shows that it costs an average of 4.98% to send money to South Asia, making it the cheapest region, while Sub-Saharan Africa is the most expensive with an average cost of 8.47%. The quarterly study also finds that sending funds is more expensive when using service providers like banks, which charge an average of 10.89%.

Slight decrease

Mobile operators are the cheapest, as their transmission costs averaged 3% and less during the reporting period. Still, the study, which predictably excludes cryptocurrencies, shows a slight decrease in the Global Weighted Average (GWA) from 5.03% in the second quarter to 5.0% in the third quarter of 2020.

The World Bank’s aptly named Remittance Price Worldwide (RPW) report monitors remittance costs in all regions. Data from the report shows that the global average remittance costs fell from 9.67% in the first quarter of 2009 to 6.75% most recently. This corresponds to a decrease of 2.92% over this period.

World Bank study shows lower transfer costs in Q3 - only cryptocurrencies meet UN target

In the meantime, the global financial institution says that in addition to tracking the global average, “another total average cost will be introduced to keep track of the average price of digital transfers in the RPW database.” Based on this cost metric, the study found that:

In the third quarter of 2020, the global average for digital transfers was 5.29 percent, while the global average for non-digital transfers was 7.24%. ”Additionally, the report data shows that transfer costs have been increasing across all posting corridors since 2008 sink.

Meanwhile, despite being absent from the World Bank’s RPW, cryptocurrencies seem to be cheaper and faster methods.

Cryptocurrencies a cheaper option

To illustrate, on the Bitcoin network, the transaction cost of coins like Bitcoin Cash and Dash remains insignificant compared to the cost of sending funds through the Money Transfer Organization (MTO). For example, in the third quarter of 2020, the average fee for sending or paying for $ 100 in bitcoin cash was less than a cent. The same was true for both Dash and Ripple’s XRP token. On the other hand, however, it can cost 10% or more to send funds between two South African countries.

Transferring funds via Bitcoin and Ethereum is also faster and sometimes cheaper than traditional transfer corridors. As the data from Bitinfocharts shows, transaction fees on the Bitcoin and Ethereum networks averaged $ 1.51 and $ 0.70, respectively, at the beginning of the third quarter of 2020 on July 1. Since then, fees have fluctuated across the two networks, but they still averaged $ 5 or less for much of the third quarter. An average fee of $ 5 per transaction is 5% when the amount sent is $ 100.

Achieving the UN SDG 10.c with cryptocurrencies

With transaction costs only a tiny fraction of a percent, cryptocurrencies like Bitcoin Cash and XRP, which the World Bank and others do not recognize, appear to have already met one of the UN’s Sustainable Development Goals (SDGs).

As part of the SDGs 10.c of the world body, the United Nations and others undertake to “reduce the transaction costs of remittances from migrants to less than 3 percent and to eliminate remittance corridors with costs of more than 5 percent”.

The UN aims to achieve this goal by 2030, yet more migrants are already using cryptocurrencies as they are a much cheaper and more convenient option.

Tags in this story

Bitcoin, Bitcoin Cash, Bitcoin Transfers, Dash, Ethereum, Money Transfers, Worldwide Transfer Prices, Transfers, Sustainable Development Goals, Transaction Fee, UN, UN SDG, World Bank, XRP

Do you agree that cryptocurrencies are cheaper to transfer than traditional methods? Let us know what you think in the comments below.

Terence Zimwara

Terence Zimwara is an award-winning journalist, writer, and writer based in Zimbabwe. He has written extensively on the economic problems faced by some African countries and how digital currencies can provide an escape route for Africans.

Photo credit: Shutterstock, Pixabay, Wiki Commons

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