Blockchain technology will end the status quo on remittance charges
Money exchange companies that charge migrants and expatriate workers millions to send money home will find themselves disrupted by new technology in the near future.
That was the assessment from Jassim Alseddiqi, chief executive of Abu Dhabi Financial Group, who was speaking at the forum.
Mr Alseddiqi said old business models should be challenged and predicted that the rise of blockchain technology would be of great benefit to consumers. He said remittances were a “very inefficient system” that will need to change.
Of the US$613 billion (Dh2.252 trillion) in global remittances last year, about 7 per cent was taken by banks and agencies. Mr Alseddiqi estimated that was $50bn lost to charges and profits.
Blockchain technology, which can enable secure payments, is expected to cut those costs significantly, said Mr Alseddiqi, whose company manages $6bn in assets.
“Today there are a quarter of a billion migrants living in all different parts of the world and they send money back to their home countries,” he said.
“Blockchain, cryptocurrencies – are all trying to tackle this issue because there’s a lot of value in it. It is a very inefficient system that needs to be disrupted.
“Blockchain, in my opinion, will be the greatest technology to decentralise and disrupt the status quo of the financial services industry.
“I think in the next five, 10 or 20 years we will see central banks disappearing because of the advances of blockchain.”