Case 40: Blockchain Can Achieve Real-Time Payments On An International Scale
To achieve real-time payments on an international scale, there will be a need to introduce foreign exchange (FX) market makers to the blockchain network. They will perform currency conversions on transactions between consumer bank accounts. Central bank participation on the network in a market maker capacity would also be needed between payment service providers in different currency jurisdictions. In this way, real-time payments could potentially be achieved on a cost-effective basis.
The foreign exchange market alone averaged more than $5.3 trillion per day in 201321 and has been increasing at a steady rate each year. The World Bank estimates that the global flow of remittances will reach a total of $610 billion (See table for Scandinavian numbers). Both of these huge markets can be improved in terms of speed and efficiency through asset-centric blockchain technology, which could form an alternative to the current systems which involves various payment service providers and clearing and settlement structures.
paid in $bn
ceived in $bn
Table: Remittances outflow and inflow in Scandinavia and Europe