Africa south of the Sahara is one of the essential links in the value chain of remittances in the world. Last year, the World Bank reported that the region accounted for more than 14% of global remittances. In 2020, the region recorded over $40 billion from its diaspora. But these transactions are not always so optimal. Between the high transfer costs and the often too long latency period, recipients can quickly become disillusioned. A solution is now at hand.
A solution that combines speed and accessibility
CoinCorner and Bitnob have signed a partnership to facilitate money transfers between the UK and Europe, to Africa. These include Nigeria, Kenya and Ghana. The remittances will be done via the Bitcoin Lightning Network, the scalability layer of Bitcoin. It is also the tool par excellence to improve transaction speeds in BTC. In fact, users can send money to these African countries faster and cheaper than those currently practiced by traditional players in the remittance industry between Africa and Europe.
Users can transfer GBP or Euros through the Bitcoin Lightning network. These funds will flow through Send Globally and recipients will be able to cash them out in naira, Kenyan shillings and cedi. Thanks to the Lightning Network, funds are automatically converted into BTC, then instantly converted into local currency and deposited directly to the recipient’s bank account or mobile money wallet.
Advantages
This system eliminates the cumbersomeness existing at the level of facilitators such as Western Union, which is based on a centralized system. Explaining the benefits of the system, partners indicated that traditionally, transactions often have long processing times, because involving several steps before approval and are known to be expensive.
For users in Africa, the solution is intended to be less expensive and faster.
Sub-Saharan Africa remains the most expensive region in the world to send money. Sending $200 cost an average of 8.2% of the sum in the fourth quarter of 2020, according to the World Bank.
“Bitcoin’s borderless nature has always made it a great tool for sending money around the world. But now, with the Lightning Network, sending bitcoin is instant and very inexpensive”. This was stated by Danny Scott, CEO of CoinCorner. He also added that the remittance market is a great opportunity to highlight the utility of bitcoin (BTC).
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