this post was submitted on 02 May 2024
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Monero is the way to handle this. The fees are stupid low and it settles within 20 minutes anywhere on planet earth. Oh, and at least as of now, it is totally untraceable, and only the sender and receiver ever know the payment even occurred.
This could work if there are reliable exchanges already available in local currency on both sides, and if both sides have bank accounts and the technical know-how to use exchanges. However, if Monero were to become a large scale method of remittance transfers, then Monero could be overvalued in exchanges in source countries and undervalued in exchanges in destination countries, especially in situations where the currencies are not freely convertible. With P2P exchanges this situation may become even more exaggerated.
Eventually HFT traders may catch on and level the market, but this would essentially mean a transfer of wealth from the masses sending remittances to a few HFT traders.
My point is, though sure it works fine in limited situations in strong economies (where there are liquid, freely exchangable fiat currencies and fair exchanges with low fees), it is a lot more complicated than it seems to use it at such a scale or in countries with underdeveloped economies.
There's at least a decent chance that Monero may actually be a better store of value than the destination currency would be and the receiver might just choose to keep it in Monero instead of converting it to their local currency. I'm thinking places like Zambia or Zimbabwe might be some examples. Perhaps Argentina and Venezuela as well. I think a peer-to-peer exchange on both ends would be the better option since then you don't have to go through all that KYC crap and be asked tons of questions and treated like a criminal for just wanting to send money to your family members. So you would purchase Monero peer-to-peer in your country send it to them and if they need to exchange it when they get it they can choose when to do so and how much to convert.
That could make sense if Monero was a widely accepted currency for goods and services in the destination country. However, as far as I know, it usually needs to be converted to fiat currency for this.
Sure, P2P is the ideal without KYC, but if used at scale, this is going to eventually lead to an increase in value of Monero in source countries and a decrease in destination countries, especially since P2P exchanges are usually local in nature and less liquid than centralized exchanges. There would be heavy sell-side pressure in these P2P exchanges, whereas likely not nearly as many people would be buying Monero there. The spread between the buy price in developed countries and the sell price in developing economies could exceed 6%.