The World Bank sees Blockchain potential for Cross-Border payments
A blog post written by Rodrigo Mejia-Ricart, research and public policy analyst at the United Nations; Camilo Tellez, head of research and innovation at the Better than Cash Alliance; and Marco Nicoli, senior financial sector specialist at the World Bank said B2B transactions are at present “slow and opaque” as they rely on third parties to help facilitate payments. Thus, costs are high and speeds are less than optimal.
“These shortcomings make the cross-border payment industry ripe for disruption and innovation. Some see distributed ledger technologies (DLT) as having the potential to drive industry-wide change. Indeed, B2B cross-border payments, traditionally characterized by fragmentation and opacity, are a potential use case for the successful implementation of DLT,” said the authors in their post.
The average global remittance (overall) cost stood at 7 percent as of Q4 2018 — 4 percent higher than the 3 percent target set in the Sustainable Development Goals for 2030.
Distributed Ledger Technology “DLT” which utilises a distributed Blockchain can lower costs, and boost transparency, in part by eliminating the need for a correspondent banking relationship.