Last week, the Commonwealth of Nations, an intergovernmental association of 53 independent and equal sovereign states, discussed digital currency as one possible solution to the recent uptick in “de-risking”. Members expressed concern that de-risking was spreading to more and more countries, and might otherwise be steering consumers to underground channels. Indeed, an overall reduction in competition has led to an increase in the average global cost of sending remittances, which reportedly stood at 7.68% as of June 2015. Worse still, these remittances make up a significant source of GDP for developing nations, and serve as a lifeline for millions of families.
It’s refreshing to hear an intergovernmental body approach digital currency not as an innovation to be regulated, but rather as a cost-effective alternative to traditional money transfer channels. This perspective is timely, and indeed long overdue. Equally refreshing, while the Commonwealth of Nations viewed digital currency as a long-term solution to the high cost of remittance, its members committed themselves to solving the escalating problem at hand: de-risking.