Cross-border transfers, and where bitcoin fits

In the fourth quarter of 2024, the World Bank recorded a global average cost of 6.26 per cent for sending the equivalent of $200, down from 6.65 per cent in the second quarter of the same year. The same report puts the global average for digital remittance services at 4.64 per cent, against 7.81 per cent for non-digital services in the same quarter. Those two figures are the most useful pair on the page, because they isolate the effect of the channel: the same corridors, the same amounts, and a materially lower cost when the transfer is initiated digitally rather than at an agent counter.

The regional spread is wider than the global average suggests. The same Q4 2024 report records average costs of 4.49 per cent for South Asia and 4.64 per cent for Sub-Saharan Africa on the digital index, against 7.81 per cent for Sub-Saharan Africa on the non-digital index. The gap between the two channels in that region is the largest in the report, and it is a gap in the channel rather than in the corridor. Where the receiving country has mobile money and a competitive digital provider market, the cost falls; where the transfer must end in cash at an agent, it does not.

The World Bank also publishes a second measure, the SmaRT indicator, which is the average of the three cheapest qualifying services in each corridor and is intended to show what an informed consumer could pay. In Q4 2024 the global SmaRT average was 2.91 per cent, less than half the global average. The distance between the two figures is the cost of not shopping around, and it is a useful corrective to the assumption that the average is the price.

Most remittances move over correspondent banking, in which the sending institution holds a relationship with an intermediary that holds one with the receiving institution. The transfer passes through one or more intermediaries, each of which takes a margin and adds delay, and the receiving end is often a cash payout at an agent rather than a deposit. This structure is why the cost is high and why it varies so much by corridor: the number of intermediaries and the depth of the receiving market are what set the price.

A second set of rails bypasses correspondent banking entirely. Money transfer operators maintain their own agent networks and settle between themselves, which removes some intermediaries but adds a different cost — the physical network of agents that must be paid for. Digital-first services, including mobile money operators and app-based providers, sit on top of one or both of these structures and compete mainly on the exchange-rate margin rather than on the fee. The World Bank's digital-versus-non-digital split is measuring the effect of that competition.

Bitcoin is a third possibility, and it is a genuinely different structure rather than a cheaper version of the same one. A transfer can be sent on-chain or over the Lightning Network and converted to local currency at the receiving end. The intermediate cost is the network fee, which is small and does not scale with the amount, and the settlement is not dependent on banking hours in either country. What it does not remove is the cost of the two conversions — local currency into bitcoin at the sending end and bitcoin into local currency at the receiving end — and those conversions are where the exchange-rate margin reappears.

The honest answer is that bitcoin is not a significant share of global remittance volume, and the reasons are structural rather than technical. A remittance is a transfer from someone who earns in one currency to someone who spends in another, and both ends of that chain need local-currency liquidity. Bitcoin can carry value across the middle of the chain cheaply, but it cannot supply the liquidity at either end, and the conversion spread at each end is set by the same local market conditions that set the margin on a conventional transfer.

Where bitcoin has been used in practice, the pattern is specific. It appears in corridors where the conventional rail is unusually expensive or unreliable — where the receiving country has exchange controls, where the banking system is under stress, or where the sender's own access to banking is restricted. In those conditions the comparison is not against a 6 per cent average but against a rail that may be unavailable at any price, and the relevant advantage is availability rather than cost. That is a real advantage, and it is also a narrow one.

The other practical constraint is the recipient's ability to hold and convert. A recipient who wants local currency on arrival needs a venue or a counterparty willing to buy, and in a thin market that spread can exceed the entire cost of a conventional transfer. A recipient willing to hold bitcoin avoids that spread and takes on price risk instead. Neither is a free lunch, and a comparison that quotes only the network fee is comparing the cheapest link in the chain against the whole of the alternative.

The liquidity page explains why the depth of the market at each end decides the conversion cost, and the comparison with traditional payment rails sets out how settlement and reversibility differ between the two models.