Finder makes money from featured partners, but editorial opinions are our own. Advertiser disclosure

How the blockchain is revolutionizing the money transfer industry

Can the blockchain revolutionize international money transfers by bringing cryptocurrency mainstream?

Since bitcoin was created in 2009, it’s been touted as the future of the global financial industry. The jury’s still out on that, but bitcoin represents a wellspring of potential.

One reason is that bitcoin is completely digital. You can’t touch it like you can touch fiat currency — or government-issued money like US dollars, euros or Japanese yen. And in many ways, bitcoin offers advantages that fiat money doesn’t: It’s hard to send $10,000 in cash overseas, but you can send the equivalent amount in bitcoin in just minutes.

If bitcoin is an intriguing subject, so is the blockchain — a digital ledger that records every single bitcoin transaction. Without the blockchain, bitcoin wouldn’t be possible.

Both bitcoin and the blockchain offer tantalizing possibilities for international money transfers. But are they effective now, and will they ever catch on among the wider public?

The promise of cryptocurrency

Let’s talk about what makes cryptocurrency so unique — and so promising.

Consider a fiat currency like the US dollar. It’s printed by the US Treasury Department and distributed by banks like the Federal Reserve. If for some reason these institutions decided to stop issuing currency, we couldn’t obtain any new dollars.

Cryptocurrency is different. It’s decentralized, meaning it’s not controlled by governments or banks. That means anyone in the world is free to buy and sell cryptocurrency like bitcoin.

Also consider the notion of storing your money in a bank. At some level, you need to trust that the bank has safeguarded your money and that you can withdraw your funds at any time.

In contrast, cryptocurrency was created so you wouldn’t have to trust any central institution. To make this possible, cryptocurrency uses blockchain technology. The blockchain, for example, records every bitcoin transaction ever made.

Each trade is publicly displayed for the world to see. Nobody owns the blockchain, and bitcoin’s software is open source, with a source code that’s publicly accessible for inspection, modification or enhancement.

Because bitcoin’s existence doesn’t depend on a central authority, it can theoretically be moved around the world more easily than fiat currency. But “theoretically” is key: In the real world of international money transfers, bitcoin has encountered many challenges that keep it from becoming the universal standard.

Are bitcoin and the blockchain effective for money transfers?

Compared to existing money transfer options, bitcoin is typically more complicated, slower and more expensive. That’s a triple disadvantage against traditional methods like banks and wire services.

Consider these negatives of bitcoin-based overseas money transfers.

  • Bitcoin comes with a learning curve. Cryptocurrency isn’t as simple to understand as regular cash. Also, if you want to use bitcoin to convert one fiat currency to another, you have to manage the entire process yourself. (A money transfer provider will do that for you as part of its service.)
  • It’s quick to transfer bitcoin, but your overall fiat-to-fiat transfers will be slowed by financial institutions. Bitcoin transfers themselves are quite fast. The problem is that if you’re making a bitcoin money transfer that involves fiat currency at any point, you’ll probably have to use a bank transfer. That instantly eliminates bitcoin as the fastest option for a fiat transfer. If speed is what you’re after, you could skip bitcoin entirely and just send a wire transfer through your bank.
  • Exchange rates often make currency conversion expensive — and bitcoin exposes you to them twice. Let’s say you’re converting US dollars to euros. Normally you’ll lose money on the exchange rate once, getting a slightly worse rate when converting dollars to euros. But when you convert through bitcoins, you lose money on both the dollar-to-bitcoin and bitcoin-to-euro conversions.

For more detailed explanations about these issues, read our article on bitcoin transfers vs. traditional money transfers.

The potential is out there

Right now, bitcoin isn’t a superior option for fiat-to-fiat money transfers. It’s simply too unwieldy for consumer remittances. But along with the blockchain, it’s quietly working behind the scenes to spark a revolution in the money transfer industry.

As we’ve just discussed, cryptocurrency is decentralized — they don’t rely on governments or financial institutions to exist. That’s a critical advantage, as it means blockchain transactions can fluidly bypass the web of financial middlemen built up over decades.

Innovative startups and financial institutions are taking note, leveraging the blockchain for big wins. Payment app Circle, for example, uses the technology to move money swiftly around the world and create savings for its customers.

You don’t have to work with cryptocurrency at all — Circle manages them in its backend processes while you deal exclusively with fiat. Crucially, using the blockchain allows Circle to charge no fees for depositing, sending, receiving or withdrawing money. And it allows Circle to charge a minuscule 0.25% to 0.5% markup on the exchange rate.

You can only use Circle for US dollars, euros or British pounds. Also, you have to wait a few days for withdrawals to your debit card or bank account. But Circle raises tantalizing possibilities for the future of cryptocurrency. Will its competitors keep up?

The blockchain is catching on

As it turns out, the blockchain is being embraced enthusiastically by the financial industry. Many banks are aware that they need to evolve with the changing times — especially when they’re being assaulted by scrappy startups hoping to bring them down.

The blockchain allows banks to upgrade inefficient processes that infuriate customers today. Transactions are expensive, but the blockchain makes them cheaper by cutting out intermediary banking costs.

Sending money can be slow, but the blockchain can complete transfers in minutes. Consumers long for confirmation that their remittances are successful, but the blockchain can unequivocally confirm delivery each and every time.

Clearly, the blockchain brings many advantages that will simply be too good to pass up. Financial institutions are well aware of that: According to a report from IBM, 15% of banks will be using the blockchain in 2017. Furthermore, IBM expects about two-thirds of banks to be implementing the technology within just four years.

In time, cryptocurrency and the blockchain may have an invisible hand in virtually all of our financial transactions. They’ll serve as the unsung heroes in the fiat system we’ve grown to trust. But are they destined for more?

What’s next for the blockchain?

The blockchain wasn’t originally envisioned to play second fiddle to a fiat system. It was created to take over entirely.

It’s plausible to imagine a far future where this will happen, but this won’t be the case anytime soon. Instead, blockchain technology will continue to grow slowly and steadily in the public’s consciousness.

First, it’ll overhaul the financial industry, as it’s doing now. It’s improving money transfers in every way, and soon it’ll be indispensable for nearly every remittance company in the world.

Next, more money transfer providers will offer seamless cryptocurrency-to-fiat conversions — cheap ones too. Many existing cryptocurrency platforms let you convert digital currencies to fiat (and vice versa), but they’re often expensive.

Other platforms like Circle are content to use bitcoin just to streamline fiat transactions. In time, providers may offer low-cost remittances in both cryptocurrency and fiat — like digital bazaars for any currency you could imagine.

Finally, more and more merchants will start accepting cryptocurrency as payment. This is when the blockchain will begin acquiring mainstream relevance. The process may be arduous, but it’s not much different than a company like Apple coaxing retailers to accept Apple Pay.

Merchants need to be convinced of the benefits of cryptocurrency before they’ll adopt new forms of money. Either that, or cryptocurrency needs to become as widespread as credit cards, at which time retailers will have no choice but to keep up.

If this future comes into existence, it’ll have great implications for currency — fiat, digital or otherwise. Sending money back to family overseas would be as easy as giving cash to a friend. And numbers on a smartphone would be as spendable as coins in our pockets. If we achieve that reality, we may finally see the cryptocurrency revolution we’ve long been promised.

Whether products shown are available to you is subject to individual provider sole approval and discretion in accordance with the eligibility criteria and T&Cs on the provider website.

Name Product USFMT Filter Values Fastest Transfer Speed Fees (Pay by Bank Transfer)
OFX International Money Transfers (Business)
24 hours
$0
Business customers: Send safe, no-limit transfers with no fees and competitive exchange rates.
Xe
Within minutes
From $0
Xe has fast transfers with low fees and a range of foreign currency tools.
MoneyGram
Within minutes
From $0
MoneyGram has fast cash pick-up transfers to more than 350,000 agent locations worldwide.
Instarem
24 hours
From 0%
New Instarem customers will get a special FX rate and zero-fees on their first transfer.
Instarem offers offers rewards on every transaction.
Xe Money Transfer for Business
24 hours
$0
Save your time and money with Xe Money Transfer for business.
Remitly
Within minutes
From $0
Remitly has quick, affordable transfers around the world, with both express and economy options.
CurrencyTransfer
24 hours
$0
CurrencyTransfer lets you shop around for the best exchange rate on its online marketplace.
WorldRemit - 4free
Within minutes
From $0.99
Use promo code 3FREE and pay no fees on your first 3 transfers. Conditions apply.
WorldRemit sends money to 110+ countries for bank-to-bank deposits, cash pick-ups or mobile top-ups.
OFX
24 hours
$0
OFX has no maximum limit transfers, with competitive exchange rates for 45+ currencies.
PayPal (business)
Within minutes
$0
Provides business solutions for small business owners in over 24 currencies worldwide. Try 3 months free of Spotify Premium when you sign up with PayPal.
Wise (TransferWise) International Money Transfers Business
Within minutes
From $8.16
Enjoy high maximum transfers into more than 40 currencies, while saving up to 90% over local banks.
Wise (TransferWise)
Within minutes
From 0.41%
Wise uses the mid-market rate and transparent fees to help you send money in 50+ currencies.
Wise (TransferWise)
Within minutes
From 0.41%
Wise uses the mid-market rate and transparent fees to help you send money in 50+ currencies.
CurrencyTransfer for Business
24 hours
$0
Increase business efficiency with zero transaction fees and same-day transfers.
WorldRemit
Within minutes
From $0.99
Use promo code 3FREE and pay no fees on your first 3 transfers. Conditions apply.
WorldRemit sends money to 110+ countries for bank-to-bank deposits, cash pick-ups or mobile top-ups.
CurrencyFair
24 hours
€3
CurrencyFair has bank-beating exchange rates and fast transfer times on 15+ popular currencies.
OFX
24 hours
$0
OFX has no maximum limit transfers, with competitive exchange rates for 45+ currencies.
CurrencyFair
24 hours
€3
CurrencyFair has bank-beating exchange rates and fast transfer times on 15+ popular currencies.
Remitly
Within minutes
From $0
Special offers like free transfers and better exchange rates available for new customers.
Remitly has quick, affordable transfers around the world, with both express and economy options.
Remitly
Within minutes
From $0
Special offers like free transfers and better exchange rates available for new customers.
Remitly has quick, affordable transfers around the world, with both express and economy options.
Remitly
Within minutes
From $0
Special offers like free transfers and better exchange rates available for new customers.
Remitly has quick, affordable transfers around the world, with both express and economy options.
PayPal
Within minutes
From $0
Use PayPal to safely send money and receive payments from around the world in over 25 currencies with just an email address or mobile number. Try 3 months free of Spotify Premium when you sign up with PayPal.
Xe
Within minutes
$3
Xe has fast transfers with low fees and a range of foreign currency tools.
loading

Are you visiting from outside the US?

Select an option to continue

Kelly Suzan Waggoner's headshot
Editor-in-chief

Kelly Suzan Waggoner is a Personal Finance Editor at AOL and the former US editor-in-chief at Finder, where she worked with a talented team of expert writers and editors focused on helping readers to save money, earn money and grow their wealth. She joined Finder in 2016 as an editor, germinating the site from money transfers to include the wide scope of personal finance. Kelly has worked with publishers, magazines and nonprofits throughout New York City to develop best practices around editorial, SEO, plain language and accessibility, including Black Dog & Leventhal Publishers, HauteLife Press and Queerty. She is quoted on such sites as Lifehacker and CertifiKid, and ghostwrote Copyediting and Proofreading for Dummies, published by Wiley. Kelly earned a BA in English from Russell Sage College and a Poynter ACES Certificate in Editing from Poynter News University. She is trained in digital and website accessibility and plain language, and is a member of ACES: The Society for Editing and the Center for Plain Language. Between projects, she toys with words, flips through style guides and fantasizes about the serial comma’s world domination. See full bio

Kelly Suzan's expertise
Kelly Suzan has written 47 Finder guides across topics including:
  • Plain Language Consultant
  • Editorial SEO
  • Digital and website accessibility

More guides on Finder

Ask a question

Finder.com provides guides and information on a range of products and services. Because our content is not financial advice, we suggest talking with a professional before you make any decision.

By submitting your comment or question, you agree to our Privacy and Cookies Policy and finder.com Terms of Use.

Questions and responses on finder.com are not provided, paid for or otherwise endorsed by any bank or brand. These banks and brands are not responsible for ensuring that comments are answered or accurate.

This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.
Go to site