The United Nations showed its support for blockchain and other bleeding-edge technology startups at the 5th annual Global Forum on Remittances, Investment, and Development with the first ever RemTech Awards, on June 15.
Remittances to Drastically Reduce Cost by 2030
The Forum focuses on the challenge of reducing the cost of remittances to 3 percent of the transaction amount by 2030 — one of the 17 Sustainable Development Goals set by the UN in September, 2015.
The current global average cost of remittances was reported by different sources at the conference either as 7.3 or 7.45 percent. $445 billion USD in personal remittances were transmitted by some 230 million migrants or refugees in 2016, implying that they collectively spent at least $32 billion in fees.
As both a private and public sector initiative, the Forum was attended by senior executives from leading remittance companies such as Western Union, Moneygram, RIA, and UAE Exchange. Also attending were top government officials, representatives of several central banks, and respected members of the academe.
When probed about the likelihood of achieving the 3 percent goal, the general sentiment was one of cautious optimism. A common complaint during the conference’s many panels was the challenge of building a money transfer business that was constantly under threat of being “derisked” by banks.
One ambassador went so far as to say that some banks exaggerate the threat of terrorist financing in order to preserve their market share and edge out remittance competition.
New Technology Is Democratizing the Remittance Industry
The RemTech Awards is a joint project of International Money Transfer Conferences (IMTC), International Fund for Agricultural Development (IFAD), the World Bank, and United Nations Department for Economic and Social Affairs (UN-DESA). Its judges included specialists from all over the world, including payments experts Leon Isaacs, Faisal Khan, Yakov Kofner, and Francois Briod.
A primary theme of the awards was the democratization of the remittance industry via new technologies such as the blockchain, which has helped foster new entrants on to a field dominated by legacy players.
Twenty-one awards in total were given out, recognizing different aspects of the industry and ecosystem. The Judges Overall Favorite was the well-known Azimo online remittance service, primarily for its ease of use and substantial customer adoption. The award was accepted at the ceremony by its founder and CEO Michael Kent.
Popular Mexican bitcoin exchange Bitso received the “Pioneering Spirit” award, and was represented at the forum by product manager Eduardo Arenas. Thailand-based cryptocurrency startup Everex was recognized for “Service Originality” and was represented by founder Alexi Lane.
Additionally, the Australian blockchain company DigitalX was bestowed the “Financial Inclusion” award for its AirPocket product, and the Spanish TransferZero was recognized as a “Digital Pioneer” in Spain.
Can Bitcoin and blockchain make a difference in lowering remittance fees? Let’s hear your thoughts.
Disclosure: The author is one of the co-presenters and judges of the RemTech Awards. He is also founder of the blockchain remittance startup Bloom, and author of the ebook Reinventing Remittances With Bitcoin (2017).
Images via Pixabay, Western Union