The Bahamas-based payment platform partners with Circle to offer USDC stablecoin as a low-cost and accessible option for cross-border payments.
Island Pay is a payment platform and fintech company based in the Bahamas that aims to advance financial inclusion in the region and enhance the financial experiences of both the unbanked and banked populations.
The company provides a digital wallet that allows users to send and receive money, pay bills, top up prepaid cards, and shop online.
A solution for high-cost and low-access transfers
According to Bloomberg, Latin America is facing high costs and challenges of traditional settlements. People sending money to their loved ones are subject to high transfer rates and a good portion of the population is unbanked.
In 2021, Latin America received more than $130 billion in remittances, with the industry dominated by high-cost companies like Western Union and MoneyGram that charge upwards of 10% for each transaction.
To address this issue, Island Pay has become the latest company to offer crypto as a remittance option.
The company has partnered with Circle, a global financial technology firm that provides digital currency services, to use its USDC stablecoin as its main medium of exchange.
USDC is a cryptocurrency that is pegged to the US dollar and backed by reserves of the same.
CiNKO: A stable digital wallet
The wallet, known as CiNKO, will be available in more than 30 nations, enabling users to fund prepaid cards, conduct business with vendors, and send payments to other users without a bank account.
Users can also convert USDC to their local currencies at any time.
“Our goal is to continuously look for ways to advance financial inclusion in the region and enhance financial experiences for both the unbanked and banked populations,”
Island Pay CEO Richard Douglas
Circle’s Chief Business Officer Kash Razzaghi stated in an email that the CiNKO wallet is a component of a larger initiative to introduce stablecoins and decentralized finance protocols in Latin America.
According to a recent report by Circle, the technology might cut the cost of international transfers by 80%. While receiving USDC on CiNKO wallets is free, depending on the blockchain the transaction is executed, there may be a “gas fee.”
Crypto Remittance Options in Latin America
Crypto-based remittances have several advantages over traditional methods, including faster transactions, lower fees, greater accessibility, more transparency, and increased innovation.
However, they also face challenges, such as regulatory uncertainty, volatility risk, an education gap, and an infrastructure gap.
Island Pay is not the only provider of crypto remittances in Latin America.
Several other companies, such as Bitso, Valiu, Ripio, Paxful, and LocalBitcoins, are already operating in this market, catering to the user’s various crypto payment needs.
These alternatives provide options for cross-border payments and other related services within the region.
