Wise, a British fintech business, Wise, a British fintech business, has ruled out the idea of conducting cross-border crypto remittances for the time being, citing hefty expenses.
The payments platform, on the other hand, indicated that while cryptocurrencies provide extra benefits such as speeding up the money transfer process, it also avoids the costs associated with currency exchange.
“Currently, most people still have to do conversions between fiat and cryptocurrencies and incur unnecessary friction and fees during the process. We remain very focused on reducing those fees and friction when people move money around the world,” said Pedro Barreiro, Wise’s Brazil banking and expansion head.
In this vein, Barreiro stated that Wise is also looking into the Latin American region for a crypto option, highlighting the region’s thriving digital asset sector.
A prudent approach to cryptocurrency
Wise now only allows users to buy cryptocurrencies using funds in their accounts. At the same time, its users can receive funds through platforms that provide digital assets, as long as they are governed by European Union and British regulations.
Despite Wise’s reservations, other fintech firms, like as Brazil-based Dock, have declared that they will use cryptocurrency to process international transfers as they expand.
Notably, Wise has developed a methodology that uses local bank networks to allow remittances while also facilitating currency conversion. The model eliminates the expensive commissions associated with international transfers.
Interestingly, fintech companies entering the cross-border transfer market are increasingly adopting blockchain technology, touting lower prices and fast transfers as benefits.
Overall, there are various impediments to using cryptocurrencies in remittances, including a lack of usability, the cost of exchanges, volatility, and regulatory obstacles.