How blockchain technology embraces the challenges faced by migrants

Since its inception, Blockchain technology has made a big impact in overcoming the pain points of various industries. Migrant issues are one among the pain point that has found its solution with the technologies inherent features. Challenges such as banking availability, identity verification etc have been the most prominent problem faced by migrants. From transparently recording financial transactions to increasing good governance and creating smart contracts to legally bind bilateral agreements to validate ownership and conducting voter registration, the Blockchain technology will undoubtedly play a major role in lives of migrants in future.

According to the United Nations International Migration Report, there are 258 million migrants in the world as of 2018. The reason for this trend could vary from political uncertainty and natural catastrophes to the search for a better life and of course, for a good job. To sustain the life of migrants in other countries, understanding their problems is necessary. Let’s take a look at the real-life problems and struggles of migrants and how blockchain can resolve them.

Mobile banks for the unbanked migrants.

One of the major struggles a migrant face in another country is the difficulty in gaining access to banking services. Something as easy as getting a bank account can be very difficult for them. Every bank has stringent rules that they follow while opening accounts and offering other services to migrants. One of these rules is proof of residence. The applicant must have proper documents regarding the residence to get a bank account. In case they are not able to get that document, then it becomes nearly impossible to get an account.

This is where a mobile bank enabled by Blockchain can be introduced. Blockchain-based applications can provide the same services a bank can offer to a migrant but in an efficient and cost-effective way. For example, instead of waiting days to send money to their home, crypto solutions can do the same in a matter of minutes.  A blockchain based platform allows people to set up a unique digital profile that can help to connect with their peers, aid organizations, governments, banks and payment companies. The blockchain based company, BanQu has been working to create such an identity for migrants. Migrants can connect with their ‘bank networks’- family and friends and also with associated NGOs easily through the BanQu app on their mobile phones.

Low transaction fees for migrant remittance

Traditional Money Transfer Operators (MTOs) such as Western Union and MoneyGram charge over 10% as transaction fees for international exchanges. In comparison, blockchain based transfers are cheaper and therefore, more affordable for migrants. For example, using Bitcoin, the transaction charges as seen in traditional MTOs, can be slashed down to 1 percent. Bitcoin-to-Bitcoin transfer offers minimal transfer costs when compared to MTOs. Conversion of bitcoins to local currency will not cause a loss in the value of amount the migrants send. This way not more than a penny of their hard earned money is wasted.

Blockchain for identity verification

Aside from the financial aspects, Blockchain technology can also be used to help in verifying identity and delivering digital forms of identities for migrants. Such digital identification solution companies are now many in the market. Companies like BanQu provide the digital ID for migrants and that allows easier access to basic services and other humanitarian assistance for the migrants by making their life easier.

Bottomline

As the technology matures, the 350 million people migrating globally every year will benefit from the low international transactions charges, the mobile bank services for the unbanked and the ability to provide digital identities that will help sustain their life in the new country.