Global money transfer seems to be the last frontier for the current financial system to take high fees, take too long transferring and then not explain why (on either count).
An argument for Libra includes a strong desire to democratise ‘wiring’ money across the ocean that is cheap, secure, transparent and safe via Blockchain technology.
What most consumers don’t know is that this concept of quick and cheap money transfer is already possible but that means that the current financial system would be losing one of their last money trees.
What is the average cost of a global money transfer?
According to the World Bank, the global average cost of sending $200 across the world is currently around 7 percent  , but it can be much higher than this in each country.
Additionally, in 2018 overall global remittance grew 10% to US$689 billion, including US$528 billion to developing countries. Overall global remittance is expected to grow 3.7% to US$ 715 billion in 2019, including US$549 billion to developing nations.
As stated by the Libra Association, it believes that:
- many more people should have access to financial services and to cheap capital.
- people have an inherent right to control the fruit of their legal labour.
- global, open, instant, and low-cost movement of money will create immense economic opportunity and more commerce across the world.
- people will increasingly trust decentralized forms of governance.
- a global currency and financial infrastructure should be designed and governed as a public good.
- we all have a responsibility to help advance financial inclusion, support ethical actors, and continuously uphold the integrity of the ecosystem.
With remittance costs for moving money around the world increasingly presenting a significant barrier to financial inclusion for most of the world’s population, it’s hard to argue rationally against working with new technology solutions (like Libra) that could reduce costs and support financial participation for all people, not just the wealthy. Otherwise, what’s the alternative?