Towards a Truly Decentralized Blockchain Framework for Remittance

Kevin Coutinho, NeerajKumari Khairwal () and Pornpit Wongthongtham
Additional contact information
Kevin Coutinho: L1X Foundation, Perth, WA 6005, Australia
NeerajKumari Khairwal: L1X Foundation, Perth, WA 6005, Australia
Pornpit Wongthongtham: School of Physics, Maths and Computing, Computer Science and Software Engineering, The University of Western Australia, 35 Stirling Highway, Perth, WA 6009, Australia

JRFM, 2023, vol. 16, issue 4, 1-18

Abstract: Blockchain is a revolutionary technology that is constructively transforming many traditional industries, including financial services. Blockchain demonstrates immense potential in bringing substantial benefits to the remittance industry. Although the remittance industry has crossed the mark of USD 600 billion in 2021, remittance cost is still substantially high, around 6% on average, indirectly limiting financial inclusion and promoting de-risking. The involvement of multiple intermediaries in global remittances makes cross-border payments more expensive. Many projects, including Ripple and Stellar, employ blockchain technology to provide alternative infrastructure for cross-border payments. However, the decentralization of blockchain networks in both solutions is debatable. This paper examines the market characteristics impacting remittance cost, a prominent factor driving the evolution of the remittance industry. A truly decentralized blockchain framework viz. LayerOneX, which provides remittance services at a reduced cost, is proposed in this paper. Devices with low computation and memory capacity can act as transaction validators in this solution. A universal wallet across homogeneous and heterogeneous blockchains is proposed to facilitate fast and inexpensive remittance services. Thus, a novel framework for true decentralization of blockchain-based remittance services, resulting in reduced cost and, therefore, better financial inclusion, is proposed in this paper.

Keywords: blockchain interoperability; cross-border payments; cross-chain communications; decentralization; remittance (search for similar items in EconPapers)
JEL-codes: C E F2 F3 G (search for similar items in EconPapers)
Date: 2023
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://www.mdpi.com/1911-8074/16/4/240/pdf (application/pdf)
https://www.mdpi.com/1911-8074/16/4/240/ (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:gam:jjrfmx:v:16:y:2023:i:4:p:240-:d:1122144

Access Statistics for this article

JRFM is currently edited by Ms. Chelthy Cheng

More articles in JRFM from MDPI
Bibliographic data for series maintained by MDPI Indexing Manager ().