BIS Study: Crypto Turns Crisis Currency as Cross‐Border Flows Soar to $600B

Cryptocurrency’s use in cross-border payments is closing in on 2021 highs, which eclipsed $800 billion USD.Bitcoin remains relatively popular as an asset for minor remittances, however stablecoins are the clear number one option.A study from the Bank for International Settlements uncovered that residents in developing economies were more likely to be the recipients of these crypto transfers.Digital assets are becoming an increasingly viable alternative to expensive traditional remittance methods.It’s probably been nearly a decade since people associated Bitcoin with a mode of exchange detached from the clutches of Governments and banks. Although this was a key part of Satoshi’s original vision, it has fallen by the wayside due to BTC’s sky-rocketing price and utility as a store of value.However, despite the fast-evolving industry, some still use Bitcoin – and other cryptocurrencies – to combat inefficient international transactions.A report from the Bank for International Settlements discovered that international asset flows eclipsed $800 billion USD ($1.2 trillion AUD) in 2021. While this remains the peak for cross-border crypto transaction volume, 2024 saw a resurgence to similar levels after a lull throughout the 2022 crypto bear market.Figure sourced from BIS reportRelated: “My $120k Target May Be Too Low”: Standard Chartered Analyst Raises Bitcoin Forecast as ETF Inflows AccelerateCrypto Flows Increase 25% in Nations with High Remittance FeesThe BIS report, titled DeFiying gravity, proposes that crypto is quickly growing as an alternative to traditional modes of remittance. Remittance, typically associated with migrants sending money abroad, can be particularly expensive in developing countries. The study found that nations with higher remittance costs – sometimes eclipsing a 6% fee per transaction – saw a significant increase in crypto flows. ...high costs of remittance payments through traditional financial intermediaries are associated with significantly larger cross-border flows in stablecoins and low-value BTC payments from advanced economies to emerging markets and developing markets. Raphael Auer, Ulf Lewrick and Jan Paulick, BIS Authors In particular, stablecoins have steadily become the digital asset of choice for sending money across borders – especially in regions with volatile fiat currencies.The study found that crypto was typically sent from ‘advanced’ economies – such as the US, UK and Singapore. Meanwhile, recipients were more likely to be from nations with developing or emerging economies, such as India, Nigeria and Turkey. In general, macroeconomic or political instability from the recipient nation correlated heavily with increased crypto flows.While Bitcoin and its peers haven’t overtaken the traditional financial system just yet, their growing footprint is impossible to ignore.The post BIS Study: Crypto Turns Crisis Currency as Cross‐Border Flows Soar to $600B appeared first on Crypto News Australia.