The article sites an unusual case in which Crystal Fong, 29, an entrepreneur on travel from Australia to Tokyo found herself in a prickly situation. Both her debit cards (from 2 different banks) were cancelled at the same time. Both banks cited ATM trouble as the reason for the card cancellations and offered identical solutions: sending a new pin to her home address in Australia within 5-7 business days.
On her last 1,000 yen (less than $10 USD) in “a ridiculously expensive city”, she knew she had to do something, and fast.
Bitcoin to the Rescue
Fox thought of Bitcoin. She opted to use a Coinjar wallet to withdraw yen at a bar-room BTM (Bitcoin teller machine). Comments from patrons around her reflected both the possibilities of Bitcoin and the potential drawbacks especially considering the Tokyo-based, failed Mt. Gox exchange.
Either way, Fox was instantly able to get her hands on 80,000 yen (about $700 USD) stating that:
“[Bitcoin] gave her instant access to ample cash without bureaucratic obstruction, at low cost.”
Fong says adopting Bitcoin felt “mighty liberating.”
Brutal Price Gouging on Global Payments
An independent investigation of fees as of January 2015 to send $700 USD to Zimbabwe reveals:
via Western Union:
- $58 (sender using a credit card/received in minutes)
- $58 (sender using a bank account/received in 3 days)
- $25 (using WU Pay/3 days)
- $45 (sender using a credit or debit card/received in 10 minutes)
- $20 (sender using a bank account/received in 3 days)
In addition to these fees, are conversion fees and withdrawal fees.
Opt for a wallet-to-wallet Bitcoin transaction for the same amount and the fee drops to pennies (or whatever you specify for the miners) and is instant. An hour would provide six confirmations through the blockchain.
If using a Bitcoin exchange to send the same amount, pricing varies widely yet is still far cheaper and faster than traditional money transmitters or the legacy banking system.
The article quotes David Berger, CEO of the Digital Currency Council:
“Bitcoin enables more than marginal savings because it involves no bank or money transmitter sat in the middle of the transaction charging high rent for network use — the value is transferred directly from the sender to the recipient, Berger says, which means that bitcoin can significantly undercut the market, it seems.”
Asher Tan, CEO of Coinjar, concurs:
“Bitcoins can be cashed in over 225 countries, from Andorra to Zimbabwe.”
Is the pricing of Bitcoin too volatile to be used as a widespread payment system?
The article cites Tan on the issue of volatility:
“Everyone knows that bitcoin is volatile, he admits, but echoing Fong describes the drawback as irrelevant if both ends deposit and withdraw fast.”
Over time, more infrastructure in the cryptocurrency world will make this a non-issue.
If volatility is a factor in sending funds across borders, consider holding the coins until they reach a more favorable exchange rate, then cash out, if desired. Or consider holding and using the coins in the Bitcoin ecosystem, where favorable deals exist for those who buy goods and services with Bitcoin.
Our grandkids will likely be amused and amazed that we were subjected to changing currencies every time we crossed a border.
Until we graduate from using 193 different currencies on this planet to using only a handful of coins, the opportunity is here now to transmit money across borders instantly, and cheap.
Images from Shutterstock.
Last modified: March 4, 2021 4:42 PM