Denelle Dixon, CEO at Stellar Development Fund (SDF) last week presented Blockchain Technology and its role in transforming financial services to the members of the House Financial Services Committee FinTech Task Force at Capitol Hill. In the virtual conference, she presented Stellar as a blockchain technology that has gone far ahead to solve problems in cross-border remittances. 

While addressing the members she identified that the traditional payment system is beset with slow completion times and huge transaction fees:

“Because that’s an area we know that deeply needs innovation. According to the U.N., 800 million people – about one in nine globally – are supported by funds sent home by migrant workers. Unfortunately, remittances remain expensive and slow. According to 2019 data from the World Bank, the global average cost of sending $200 across a national border is around 7%. So many people and economies are dependent on high-cost remittances that the U.N. created a sustainable development goal to reduce the per transaction cost of remittances to less than 3% by 2030.”

To remedy this problem,  Denelle iterated that Stellar protocol was designed to complete cross-border transactions in seconds with a fee as low as a fraction of a cent. She used Nigerian Cowrie’s NGNT as an example to demonstrate how stellar create equitable access to global financial System:

“Cowrie, a regulated FinTech company based in Lagos, Nigeria, provides cross-border payment services for the Nigerian market, powered by Stellar. By tokenizing the Naira and integrating with NIBSS, the Nigerian interbank payment network, Cowrie developed payment rails that enable low-cost and instant payments into and out of Nigerian bank accounts. Their product, NGNT, a digital asset backed 1-1 by fiat Naira, is available on Stellar today for cross-border payments and digital asset exchange.”

With Stellar, Cowrie can serve as an endpoint to connect users to transfer funds to the EU via Tempo which is another Stellar based Anchor in Europe. With KYC and AML measures built into these systems, compliance will never be an issue. Stellar will go a long way to enable the UN’s Sustainable Development Goal to achieve a remittance fee of less than 3%. Denelle concluded that the team at SDF will be available as resources to the Task Force to achieve their goals:

“As you consider these types of policy objectives, I want to make myself and my team available as resources to the Task Force, and I’d love to know how Task Force Members are thinking about remittances, payments and digital assets.”

The stellar protocol continues to prove itself as a viable option for governments to use as a remittance option.