MasterCard sees partnerships as key to blockchain money transfers in Latham.

MasterCard has released a white paper on remittances in Latin America. Growing faster than the global average in the region, mobile phone and internet access is fueling the shift from cash to digital options, the report said.

In the year By 2022, one in ten people worldwide will live in a household that receives remittances, totaling $831 billion. The average cost to send to Latin America is 5.8%, compared to the global average of 6.3%, and costs can reach as high as 25.5%, sometimes in poorer regions, according to Mastercard.

Competition is increasing, but sometimes it creates competition on prices. The report, citing World Bank data, found that at least half of remittances are sent informally.

Together, the report describes a number of contemporary remittance options that “reveal a whole new reality in global money transfers.” Latin America currently receives 43% digitally, the world average is 52%. Digital remittances are expected to reach $20 billion by 2026.

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MoneyGram and Stellar offer remittances using USDC (USDC), while SBI Remit does so through Ripple, he said. Ripple is leading the way in developing promising uses for central bank digital currency, along with other, more limited projects. MoneyGram's head of fintech strategy and innovation, Luther Maday, was quoted in the report as saying:

“Through new channels like USDC, we can move money faster, which ultimately translates into more liquidity for our day-to-day global operations.”

There are several other crypto players in the Latin American market, including Binance and Mastercard, which have partnered with wallet provider Belo. But problems remain in the crypto field. Issues of trust, regulation and technology adoption still hinder the growth of crypto players and other providers, the report said. Moreover:

“Current digitization efforts are limited to remittance transactions. The digital currency ecosystem in host countries needs to be developed in order to fully digitize and reduce costs widely.

“It is not enough if a recipient is unable to receive the funds through an account, card or wallet and cannot make a digital payment,” the report continued.

“Intelligent interweaving between different players” is required by all exchange providers, the report concluded.

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