With rare exceptions, even slow cryptocurrency transactions are faster than many other payment methods. Most blockchain transactions are completed in minutes, rather than hours or even days, and are able to provide assurances against error or fraud through the transparency of distributed-ledger technology (DLT).
This added speed becomes particularly important for cross-border transactions. In fact, more than 37% of businesses said they are currently using blockchain and cryptocurrencies for cross-border transactions, according to the “Blockchain Payments Tracker,” a PYMNTS and Algorand collaboration.
Get the report: Blockchain Payments Tracker
In addition, another 13% of the businesses surveyed said they would like to use crypto for that purpose. In total, 50% of firms currently use or would like to use blockchain and cryptocurrency for cross-border payments.
Transparent, Fast, Secure Operations
On Monday (July 11), Agrotoken, a global tokenization platform focused on agro-commodities, announced it has teamed up with Pomelo and Algorand as strategic allies for the implementation and development of a card designed for the agricultural sector.
Read more: Agrotoken Expands Visa Partnership With Agriculture Sector Payment Card
The Algorand blockchain will be used to make operations transparent, fast and secure. The blockchain offers high scalability and low energy consumption because of its focus on sustainability to minimize its environmental impact, the company said.
“Integrating Pomelo and Algorand into this existing partnership with Visa shows the versatility of our cryptoassets,” Agrotoken CEO and Co-founder Eduardo Novillo Astrada said in the announcement. “Agrotoken is here to change the agricultural sector, not only in Argentina, but in the whole region, and this is possible thanks to various companies and platforms that supported us and our expansion into new horizons.”
Offering Clear Advantages
That’s just one of many use cases for blockchain and crypto. For example, between early 2020 and early 2021, the value of remittances sent to Latin American countries using crypto exploded from approximately $100 million per month to nearly $400 million per month.
This was likely fueled in large part by the desire to avoid high transaction fees, but crypto cross-border payments also offer clear advantages in terms of predictability and speed. Even the Ukranian government has seen the benefits of crypto cross-border payments, as international aid has flowed into the country through crypto transactions, unhindered despite the country being in the middle of a war.
Blockchain payments remain in a nascent stage as a replacement for fiat currencies. While some merchants may be hesitant to deal directly in blockchain payments due to volatility in the value of some cryptocurrencies, the benefits of a faster and more reliable payment method that removes intermediaries are driving interest in the potential of blockchain payments.
Assisting in this revolution is the growing use of proof-of-stake protocols, which are faster, more efficient and, as a result, less costly than the traditional proof-of-work protocols that were the early standard for blockchain technology.
High-friction transactions such as cross-border payments could offer the incentive for more industries to take a serious look at developing blockchain payments.
For all PYMNTS B2B coverage, subscribe to the daily B2B Newsletter.