How Blockchain Technology is Transforming Global Remittance Systems

Abstract

Remittances sustain hundreds of millions of households, yet heritage cross-border rails remain costly, slow, and opaque. This paper examines whether blockchain-based infrastructures can provide faster, cheaper, more transparent, and more inclusive remittances—and under what conditions such systems might be both equitable and sustainable. Three research questions guide the analysis: First, what are the factors that help with remittances using blockchain technology, and how do they improve efficiency compared to traditional systems? Second, what are the core benefits and limitations of using blockchain for cross-border transfers? Third, what is the current global value of blockchain-based remittances, and how widespread is their adoption? Synthesizing recent academic and industry evidence with country cases, the findings show that disintermediation and programmability reduce costs and settlement times; transparent ledgers improve compliance and trust; mobile wallets broaden access; and interoperability enables services such as credit and insurance. Limitations of using blockchain include fragmented regulation, KYC/AML frictions, fiat on- and off-ramp fees, scalability–privacy trade-offs, and risks of re-centralization. The discussion emphasizes that impact depends less on chain choice than on market design: interoperable stablecoin rails, harmonized e-KYC, robust consumer protections, and resilient last-mile delivery. Sustainable architectures, including proof-of-stake and renewable-aligned Layer-2 solutions can mitigate environmental intensity while preserving efficiency. Overall, blockchain remittances show significant promise, but their realization depends on governance, interoperability, and coordinated innovation.