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Posted 27th February 2023

Cross-Border Payments on Blockchain in 2023

Banking regulation makes it challenging for residents of many countries, including the UK to make cross-border transactions and send cash abroad.

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cross-border payments on blockchain in 2023.


Cross-Border Payments on Blockchain in 2023

Banking regulation makes it challenging for residents of many countries, including the UK to make cross-border transactions and send cash abroad. For instance, if you intend to transfer more than 10,000 euros out of the EU, you must submit a tax return and declare the money’s origin at customs. In some circumstances, even if the sum is less than 10,000 euros, customs may need papers.

The same is true for bank transfers. The difficulty is what to do if you need to send money as quickly as possible, since the bigger the amount, the more likely you will have to pass a financial investigation, which could take some time. There may be obstacles that you may face. Once you enter another country, it is much simpler and quicker to convert funds into cryptocurrency and proceed with blockchain transfer or leave them in your wallet.

Is it legally allowed to transfer cryptocurrency abroad?

Cryptocurrency transfers are not outlawed in practically all developed countries. Some blockchain transactions, nevertheless, may be subject to the oversight of financial regulators. Nonetheless, it is critical to consider the legal context in each case. If purchasing and selling cryptocurrencies, as well as sending crypto assets overseas, are not illegal in your country, keep reading this article: it contains answers to frequently asked issues about cryptocurrency transactions abroad.

How to transfer crypto assets

First, what you will need is a verified account on a centralized exchange, for example, Binance, Kraken, Huobi, or Bybit.

You can top up the site’s account with a bank plastic card, but in some cases, you will have to use several cards. When sending one-time payments in the amount of more than a certain limit, which is set individually in each country, there will certainly be questions in the bank’s security service. In offline exchange offices, you can convert the entire amount at a time into cash. After choosing the site and the method of replenishment of the account, you need to:

Install and configure any crypto wallet on your smartphone. Popular crypto wallets that support Bitcoin (BTC), Ethereum (ETH), as well as Tether (USDT) are Atomic Wallet, and Trust Wallet.Copy the wallet address of the selected coin. To do this, go to the Wallet menu, select the asset, and click the Receive button.Top up your account. When working through an exchanger, transfer money from a card or transfer it in cash. Specify the transfer account.The received coins can be cashed in cryptomats in any country or transferred to a card opened in a foreign bank. To do this, use exchangers or P2P platforms that support transfers in dollars and euros. The general algorithm is as follows:

Open the site of the platform, and select the currency and the direction of the transaction.Specify the recipient’s card number.Transfer coins according to the details indicated on the screen.The order execution time is 5-15 minutes, the commission does not exceed 0.5-2%. Under the circumstances, this is the most convenient and cheapest way to send assets abroad.

Risks when transferring in cryptocurrency

The total expenses of users can be up to 10% if you need to transfer money denominated in a foreign currency. We will have to carry out a double conversion – first dollars into rubles, then into stablecoins, and back to USD or EUR. Exchange offices in the Russian Federation do not work with foreign currencies in cash.

But there are other risks associated with the long-term storage of funds in stablecoins:

The opacity of the provision. The fact is that issuing crypto companies are not regulated and therefore are not required to conduct an audit. Stablecoins in circulation must be backed by dollars (in cash, bonds, or other securities). But unlike traditional financial organizations, crypto companies do not publish transparent reports. According to the calculations of the Financial Times, USDT is provided with cash dollars by only 3%. Another 50% are in debt receipts. That is, in the event of a mass sale, half of the coin holders will lose money.Centralization. The USDT and USDC stablecoins have a regulatory body. There are cases of targeted blocking of coins by Tether at the request of the SEC. The company puts the address on the blacklist, and it is no longer possible to transfer coins from it. There is a possibility that such measures may be applied to all Russian users.

Which seller to choose?

You need to see detailed information about the seller. What to pay attention to?

Availability of the certificate. Try to choose from certified sellers who are marked with a yellow tick to reduce risks.Currency exchange rate. The lower the better.The number and percentage of orders executed. The higher both indicators, the better. If the percentage of successful orders is less than 80, you should not take it, even if there is a Binance check mark.The available amount of funds. It should be within the required limits. If you want to buy 3000 dollars, and only 2000 USDT is available, then choose another seller.

Conclusion

If you frequently transfer funds abroad, you can acquire cryptocurrencies in a single transaction and withdraw them to your wallet to send to someone else.

Nevertheless, due to the volatility of crypto assets, their exchange rates can fluctuate dramatically over time, so you should consider the risks of transfers, as well as the number of commissions.

Categories: Finance, News


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