Bitcoin Crushes Bank Fees in Emerging Economies

New evidence is emerging that virtual currencies and distributed ledgers, like bitcoin, are gaining strength in emerging economies by cutting out huge fees charged by local banks and financial institutions.

Developed markets make up only 43 percent of global gross domestic product and are generally not required to hold much foreign exchange reserves, yet they have been able to issue 87.5 percent of the world’s bonds. It is emerging market central banks that buy 80 percent of those bonds as foreign exchange reserves to gain market credibility.

Because of financial immaturity, emerging market banks can charge huge fees, and — except for a small band of powerful elites — offer little local access to capital. The general population and the small local merchants remain largely unbanked or underbanked.

The most egregious example of emerging market banks financially hammering the population is the percentage costs for wire transfer and currency exchange fees associated with remittances paid by the more than 250 million people living outside their countries of origin, and the 750 million that live outside their ancestral communities.

The remittance market was $588 billion in 2015 and could reach $1 trillion by 2020, according to the World Bank. Although every country on earth

Read more ... source: TheBitcoinNews

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