Remittances: Killer App to Transition Society

Sending and receiving value should be as simple as sending an email; and this is getting closer for domestic, peer-to-peer transactions. PayPal, Venmo and others have spent the past couple of decades assembling and retrofitting their layer on top of existing banking systems to make this a reality. Yet, when it comes to moving a dollar or a euro into a new jurisdiction with the same level of ease, low fees and low transaction friction, the industry has struggled. FB/Libra/Diem/et al. with all their resources tried and failed as well.

Why? The primary impediments to making international sending/receiving of value frictionless are ( a ) identity, compliance & reporting, ( b ) digitization, and ( c ) regulatory & market capture. For the uninitiated, sending any value from one jurisdiction to another requires identity verification of both parties (including sanctions checks, AML, PEP, etc. in many cases), plus real time tracking of the value sent, and associated reporting of transactions to the appropriate, multiple regulatory bodies. This means that senders need to be able to identify themselves easily, connect their bank accounts with a single click, and accurately inform the platform of the recipient’s identity and where to send the funds. Furthermore, the platform needs to automate all of the aforementioned, program-in conversion of currencies, check to ensure both jurisdictions’ laws are being adhered to, and accurately execute the transaction by pulling, converting, sending money/value, etc. Finally, a report on each transaction needs to be generated, submitted, and in most cases, made available in real time to regulators, potentially across multiple jurisdictions.

A top 2 remittance supplier once shared with us, “we have 10k employees, and 2.5k are dedicated to compliance, identity checks and reporting.” That’s a massive resource load, but also an immense opportunity to innovate using technology. Historically there has been a lot of conversion to/from physical cash, which is cumbersome, regulatorily difficult to account for, and simply added further friction to the process. And, even if a platform can automate all of the aforementioned, as Everest and a few others have, the market is still semi-captured due to the old-guard holding onto multiple licenses, and predatory contracts that oblige large partners/outlets for fiat-in and out to work exclusively with them. Are you now starting to see why 6–8%+ fees are the norm, nowhere near the 3% target of UN SDGs? And why these fees negatively impact the bottom billion of the world; those who most use remittance services, and to whom saving every dollar counts.

Good news……crypto, digitization and stablecoins are ushering in a new era to allow international remittances to be as easy, fast, frictionless and low cost as domestic payments. For those who are unaware of Everest, think of a parallel economy & society to the existing system, basically rearchitecting every facet of society to put the user in control, adhere to laws, and slowly but surely transition humanity away from these legacy systems/shackles. Remittances is one use case to kick off that process, and we started with the US to Mexico corridor, with our partner, Bitso.

Starting with identity, compliance & reporting, Everest has built this infrastructure for users to identify and eKYC themselves, and to deliver automated jurisdictional laws into automated smart contracts, all while tracking transactions to automate reporting. Concurrently, it has established a correspondent banking & exchange network to compliantly on/off board fiat and crypto in multiple jurisdictions globally. And with EverWallet as a user interface, the process is seamless.

Digitization and the move away from physical cash has been underway for a while, and was accelerated during the pandemic — which opened up the market and millions of users.

With the availability of new crypto licenses to accredited and regulated organizations, the stranglehold by the old guard to accept deposits and execute orders is broken. That is, Everest and a few others can finally compete with the old guard re their regulatory capture. In the Everest case, the architecture of issuing AND redeeming programmable, asset-backed tokens (i.e. not tradeable on 50 exchanges) is a unique, competitive advantage, as it allows us to interface with existing financial institutions without legacy licensing issues. That is, Everest can get merchant bank accounts in various jurisdictions without spending years pursuing licenses in each country. For remittances, in practice, this means Everest can accept, for instance, USD from a user’s bank account with instructions, issue a token that represents that deposit and instructions, convert, buy, sell crypto (i.e. XRP or BTC), and/or fiat in a matter of seconds in various countries around the world, and deposit a different fiat into a recipient’s account — even crypto into a friend’s wallet.

The role of innovative technology to address global issues at scale is at the very heart of Everest. But as history has shown, with every disruptive technology, there will always be conflict with existing, established systems. The beauty of Everest’s infrastructure is that it provides the atomic layer that it and others can build upon to solve the multitude of other issues weighing down our interconnected global economy. The infrastructure supports a series of other applications for a user-centric society, including buying, trading, selling tokenized value (stock, fiat, crypto, real estate), education, government services and more. It is simply a question of adoption, of hitting a consumer and business driven tipping point that will drive this new way of thinking.

Join our journey…

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