Ripple published a blog post discussing the significance of stablecoins in the remittance market and how their RLUSD solution can change global financial flows.
Stablecoins vs Traditional Remittances
According to Ripple's data, in 2024, low- and middle-income countries received $685 billion in remittances. These funds represent about 3% of GDP in over 80 countries, helping maintain financial stability. However, traditional remittance systems are often too expensive, with fees exceeding 6% and transfer times taking several days. In contrast, stablecoins offer significantly lower fees and the possibility of instant transfers.
Visa Embracing Stablecoins
Fintech giant Visa has also integrated stablecoins into its services. Since June this year, Visa has expanded its stablecoin settlement services to Central and Eastern Europe, the Middle East, and Africa, in partnership with Yellow Card, using the USDC stablecoin. This allows users to send and receive money faster and cheaper than through traditional banking systems.
Ripple's RLUSD and Its Impact on Remittances
Ripple has introduced its dollar-pegged stablecoin RLUSD, which has obtained all necessary permits for use in payments and remittances. When RLUSD is utilized for remittances, the process becomes faster and less costly since intermediaries are removed. Additionally, Ripple actively employs RLUSD in other areas, including a recent $25 million donation to support major educational nonprofits.
Stablecoins like RLUSD can significantly enhance the remittance market by providing faster, cheaper, and more accessible solutions for users worldwide.
