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they account for billions of dollars Repatriationbut most are manual laborers who do not meet the minimum monthly income of 5,000 dirhams ($1,350) required to open a bank account in the UAE, it said.
Mohammad Jalal Uddin Sikked, a labor migration researcher and coordinator at the Center for Migration Studies in Bangladesh, said migrants also often use cash transfer services because they are cheaper.
“Immigrants consider every penny carefully. There are high fees to go to a bank and send any kind of remittance,” he said.
Money transfer services in the UAE typically charge a flat fee of AED 25 per transaction.
However, cryptocurrencies that allow “peer-to-peer” transfers between online users without any intermediaries such as banks or financial institutions may still hold higher value.
Immigrants can buy cryptocurrencies using credit cards or cryptocurrency exchanges and transfer them instantly to their family members’ digital wallets. Then, their relatives will have to convert the cryptocurrencies into local currency.
Transfer fees usually range from free to 0.5%, depending on the app used and the country the coins are being sent to. There is also usually a fee for converting to or from local currency, but some services charge as little as a penny.
volatile market
As cryptocurrency services in the Gulf reap profits, banks and other financial institutions are also trying to take advantage of technological developments to make it easier and cheaper for migrant workers to send money domestically.
The Central Bank of the United Arab Emirates announced a “Digital dirham” currency It said this would help simplify cross-border payments and improve financial inclusion.
In March, an agreement was signed with the Reserve Bank of India Pilot shared infrastructure Facilitate cross-border transactions of national digital currencies for remittance and trade.
UAE remittance industry body FX and Remittance Group said in its 2022 annual report that its membership is also growing Offer mobile and digital payments Respond to demand.
But some immigrants who hold crypto cash say they are looking for less risky options.
Ahmed Abdel Fattah, an Egyptian immigrant in the UAE, used cryptocurrencies to invest and send remittances, but he began to lose faith in digital assets after the market crash in 2022.
“I lost more than half of my investment,” said driver Abdel Fattah.
“It’s a very volatile market. That’s why I stopped investing in cryptocurrencies and I’m now looking at other options.”
Howson said the use of cryptocurrencies and blockchain services will be limited in the absence of better, more secure options.
“Cryptocurrency worked for immigration until it didn’t work,” he said.
“Blockchain is useful when you don’t trust political and financial institutions … (but) no one wants to be held accountable when things go wrong.”
This story is published with permission Thomson Reuters Foundation, the philanthropic arm of Thomson Reuters, covering humanitarian news, climate change, resilience, women’s rights, human trafficking and property rights.access https://www.context.news/.
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