Ripple XRP Facts Do Matter, Biggest Crypto Return on Investment will be Tied to Utility & Use Cases

Sending money home: Ten reasons why remittances matter, now more than ever.

Over the past decade, remittances to low- and middle-income countries increased by 51 per cent, at a rate averaging 4.2 per cent annually, from US$296 billion in 2007 to over US$554 billion in 2019. These flows exceed three times the combined official development assistance, and are greater than total foreign direct investment to almost every low- and middle-income country.

Over 50 per cent of remittances are sent to households in rural areas, where 75 per cent of the world’s poor and food-insecure live. Rural households rely on these flows for improving their livelihoods, increasing their resilience, and achieving their own SDGs. Globally, the accumulated flows to rural areas over the next five years will reach US$1 trillion.

In 2019, the number of migrants worldwide was estimated at 272 million, up from 220 million in 2010 and 173 million in 2000. The growth rate of remittance flows has been greater than the growth rate of migration. The driving force behind the remittance phenomenon is an estimated 220 million migrant workers, sending on average US$200 each, between 10 and 12 times a year, to their families in their home countries.

In 2023, the COVID-19 pandemic has dramatically impacted remittance flows. According to the latest World Bank forecast, remittances worldwide are expected to decrease by 20 per cent. This translates into a drop of US$110 billion in available resources to cover for basic needs such as food, health, housing and educational expenses of millions of migrant families.

A staggering one billion people, or one in seven in the world, are involved with remittances, either by sending (200 million migrant workers) or receiving them (an average household of four people). One in nine people in the world – around 800 million in total – benefits from these flows.

Migrant workers send on average US$200 or US$300 home every one or two months. This represents only 15 per cent of what they earn, as the rest stays in their host countries. What they send can make up as much as 60 per cent of a household’s total income and represents a lifeline for millions of families.

About 75 per cent of remittances are used to put food on the table and cover medical expenses, school fees or housing expenses. In times of crisis, migrant workers may send more money home to cover loss of crops or family emergencies. The rest, about 25 per cent of remittances, representing over US$100 billion per year, can be either saved or invested in asset building or activities that generate income and jobs and transform economies, particularly in rural areas. Remittances can be an engine of development.

Remittances can be costly to send. Currency conversions and fees cost, on global average, seven per cent of the amount sent. SDG 10.c aims to reduce transaction costs to less than three per cent by 2030. Technical innovations, particularly mobile technologies, digitalization and blockchain, can fundamentally transform the markets, coupled with a more conducive regulatory environment.

Migrants make an invaluable contribution to the Sustainable Development Goals through remittances and investments. In particular, they contribute to ending poverty (SDG 1) and promoting zero hunger (SDG 2), good health (SDG3), quality education (SDG 4), clean water and sanitation (SDG 6), decent work and economic growth (SDG 8) and reduced inequalities (SDG 10). Their contribution to development, through remittances and investments, has also been recognized in Objective 20 of the Global Compact on Safe, Orderly and Regular Migration, adopted by the United Nations General Assembly in December 2018.

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Ripple XRP Facts Do Matter, Biggest Crypto Return on Investment will be Tied to Utility & Use Cases

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