Cryptocurrencies are 50,000 times cheaper than traditional means of sending money

Binance has published a new study on blockchain-based cryptocurrency payment methods, comparing their efficiency and cost with traditional methods. The report “Blockchain Payments: A New Beginning” presents data on global financial transactions.

“Just as messaging apps revolutionized communication, cryptocurrency payments are transforming financial transactions,” notes the Binance Research report.

According to the publication, traditional payment methods involve up to six intermediaries compared to one or two on the blockchain. Furthermore, the global average cost to send $200 via traditional methods is 6.35%, or $12.70, according to data from the World Bank.

This is 50,800 times more expensive than using blockchain to send any amount of stablecoins. This is because most blockchains charge a fixed gas fee, regardless of the amount transferred. On a layer 1 blockchain like Solana, the cost to send $200 would be around $0.00025.

Also according to Binance, major players in the credit card segment are testing blockchain-based institutional settlements.

“Latin America is a thriving market for cryptocurrencies. We have three countries in Chainalysis’ top 20 markets. Cryptocurrency payments have attracted more people to this industry in the region because it allows people to keep their money invested and use it for daily needs at any time,” said Guilherme Nazar, Binance’s Regional Vice President for Latin America.

Cryptocurrencies for sending money

Binance’s report further highlights that despite being one of the largest and fastest-growing global sectors, the payments industry still largely operates on 50-year-old outdated infrastructure.

Modern payments fintechs and card networks have made the end-user experience extremely convenient for both consumers and merchants.

However, the legacy cost of involving up to six intermediaries (e.g., card networks, issuers, processors, POS systems, aggregators, digital wallets) in each transaction persists. Blockchain technology offers a new set of globally enabled infrastructure rails for payments, built from the ground up.

According to the research, blockchains have the potential to significantly reduce the cost and increase the speed of cross-border payments. This is already happening at an institutional level, with major players running pilots that enable institutional-grade global payment settlement on public blockchains.

“The payments industry is huge, which means that the adoption of disruptive technologies like blockchain will likely be slow and cautious. This gives the blockchain industry the time it needs to emerge from its adolescence and build the tools and infrastructure needed to solve its own growing pains,” he concludes.