No banks or policymakers can change the future for DeFi
I am a kid from the southern border of Texas. Many of my colleagues in the United States have come here to work and send money back home. Unfortunately, what they make is not enough, and they have to pay a lot of fees on the transfers made. These people don’t focus on making money but want to support their families in their native country. They still support their families no matter how long they have to work, which costs them a lot.
Let me tell you the truth, and my papa was a migrant worker. He picked fruits in the fields. We sent funds back to our family in Mexico. The remittance providers were the wall between us achieving the American Dream and Prospering. They took away whatever little money we made.
The world is corrupt, and we need DeFi. The governments and internationally controlled by the powerful, and the interest of the common people are at the bottom. Credit Cards and personal loans charge a ton of fees, as do remittances.
When the migrants send a part of their earnings in remittances, they are a whole pool of foreign income for various developing economies. Remittances are vital for low-income countries, making 4% of their GDP, compared to 1.5% of the GDP for middle-income countries. Compared to capital flows, remittance flows are essential; call them countercyclical, meaning capital increases during an economic downturn or after a natural catastrophe when private capital flows fall.
DeFi is the solution to lower the fees migrant workers are charged to transfer money home, saving billions of dollars. Remittances take up to 20% fees. The people have to send money to their houses in Africa, Asia, and Latin America, no matter the fees they are desperate. They want to uplift their family and make them financially stable.
Hundreds of billions of dollars are transmitted home annually. It’s more than the official development aid. A significant chunk of remittance goes to low and middle-income countries. Remittance covers more than a quarter of the national GDP in Kyrgyzstan, Liberia, and Nepal. According to UNESCO’s 2019 Global Education Monitoring Report, the average costs are 7%. To add on, traditional banks take the most remitters. The fees? 10%! Big banks have made monopolies on remittances, having the upper hand. The world needs to serve the underserved, and not policymakers and bankers. We need DeFi.
The legal way to rob remittance
If you start to tally, all the centralized finance numbers make a narrow margin on migrants simply sending their own money. The main reason why the world needs decentralized finances. No one wants to pay a fee when transferring money, and you shouldn’t. Use decentralized finance and get rid of the outstanding fees when sending money back home.
If you use a decentralized exchange, no one will take your money from you because you and only you have the key. You can do many things like borrow, lend, and trade. DeFi paired with stablecoins is a force to reckon with, particularly for the unbanked.
We should thank crypto, as migrants can send money to loved ones back home for less, and the people back home can now earn passive income in the decentralized finance space. They get options such as liquidity pools or staking and get the superpower of being their bank. Don’t give your hard-earned money to a middleman or a bank. You do not deserve negative interest rates.
DeFi projects have only one purpose, benefiting others. Participants can make a profit by helping others. People are being provided with food and relief material due to decentralized finance. That is the beauty of it. The feeling of wanting to share is created because people have the power. It drives humans to think about other humans, giving us the ability to do good. When we start improving ourselves, we become a problem to people around us. A healthy environment helps us all grow.
DeFi creates a trustless environment in which smart contracts play the leading role. These Blockchains are building history and writing a new definition of finance.