The Emergence of Web 3+: The Problem with TradFi Remittance
Presently, the digital remittance market is experiencing an unprecedented surge, attributed to the widespread adoption of digital payment platforms and the escalating number of migrant workers and cross-border citizens worldwide. The COVID-19 pandemic has further catalyzed this trend, compelling ordinary individuals to increasingly rely on digital avenues to send financial support to their families and loved ones, particularly in regions where conventional remittance outlets have suffered setbacks.
The global remittance industry is intimately familiar to many, especially blue and white-collar workers engaged in overseas employment. The recurrent duty of sending financial support back to loved ones in their home countries is a well-known reality. However, the extent of this industry's influence might surprise some, particularly in South-East Asia where it boasts a staggering $5 billion valuation. In the current landscape of 2023, the average remittance transaction has reached $8.4k, signifying a growth of 14.4% compared to the previous year. This upward trajectory is poised to continue as the entire industry, akin to numerous others, braces for the transformative impact of blockchain technology.
The expansion of alternative digital remittance methods owes itself to a confluence of factors. This includes the growing prevalence of smartphones and internet connectivity, rising demand for swift, secure, and cost-effective cross-border payment solutions, and the persistent rise of global migration despite the influence of populism and the pandemic. Even a return to pre-pandemic norms is projected to sustain the annual growth of remittance volume, as remote work options gain prominence and individuals seek opportunities across borders.
In conjunction with these trends, an increasingly favorable regulatory landscape and more defined frameworks aimed at fostering digital payments, coupled with the growing advocacy for financial inclusion, are propelling the ascent of blockchain-based payment solutions.
The trajectory of this industry will receive an additional boost from upcoming government initiatives designed to incentivize digital payments in the years ahead. Notably, Velo and its counterpart Lightnet are well-positioned to harness the momentum of the digital payments revolution. In an age that is progressively borderless, anonymity emerges as a notable factor. Presently, there is a simultaneous emphasis on both transparency and anonymity, an unprecedented scenario. Corporations are notorious for exploiting data to their advantage, leaving individuals susceptible to ethical dilemmas that blockchain and digital payments can help resolve.
Velo is poised to bridge the gap between these corporate giants and the everyday individual, effectively aligning with government regulations in the nascent yet burgeoning digital economy. Through its array of offerings, most notably its swift remittance network powered by Lightnet and its crypto-powered payment app, Orbit, Velo is set to facilitate borderless and economical transactions for the masses. This is especially relevant considering the financial hardships faced by many migrant workers in an era marked by inflation and inadequate wages, considering the demanding hours they put in. The substantial cost savings and reduction in transaction time facilitated by smart contracts will undoubtedly provide much-needed relief to the financially vulnerable and disadvantaged segments of society.
About Velo Labs
Velo Labs is a financial technology company using blockchain technology to create a compliance-first financial ecosystem through products and services such as Universe. With scalable and interoperable solutions, Velo Labs aims to enhance global asset movement and financial inclusion while driving mainstream adoption of digital assets.