Are you looking for a cheaper way to send money to family abroad?
Sending money to family or friends in another country can feel slow and costly. You often have to rely on banks or money transfer services, which have fees and can take days. There is a newer way to do this using digital money, also known as cryptocurrency. This method can be much faster and cheaper.
Let’s explore how you can send money internationally using crypto, what you need to know, and how to do it safely.
What is a Crypto Money Transfer?
Think of it like sending a digital package of money directly to someone else. Instead of a bank moving the money for you, the transfer is recorded on a secure, public ledger called a blockchain. This system allows you to send funds from your digital wallet to another person’s wallet, often in just a few minutes. Because it cuts out the middleman, it can save you money on fees.
What You Need to Get Started
The process involves a few key things. It’s important to understand each one.
A Crypto Wallet
This is a special app or program that holds your digital money. There are two main kinds. One is managed by an exchange or company, which is like keeping your money in a bank. The other is a wallet where you hold the “keys” yourself, giving you full control but also full responsibility. Losing your keys, often a “seed phrase” (a list of words), means you lose your money forever.
A Stable Digital Coin
Some crypto can change in price very quickly. To avoid this, it’s best to use a “stablecoin” like USDT or USDC. These are designed to always be worth one US dollar, so the amount you send is the amount they receive.
A Transfer Network
This is like choosing a highway for your money to travel on. Different networks have different speeds and costs (fees). A popular choice is the TRON network (also called TRC-20) because it is fast and has very low fees. It is critical that you and the receiver use the exact same network, or the money will be lost.
The Good and The Bad of Using Crypto
Before you send money this way, it’s wise to weigh the benefits and the risks.
The Good Parts
- Lower Fees: The cost to send money is often much lower than traditional bank wire transfers, which can have fees over 6% or even 12%.
- Works 24/7: You can send money any time of day, on any day of the week, including weekends and holidays.
- Very Fast: Instead of waiting for days, the person you’re sending money to will usually receive it in minutes.
- Works Everywhere: It’s a useful option for sending money to places with limited banking services.
Things to Be Careful About
- Price Swings: If you don’t use a stablecoin, the value of the crypto could drop before the receiver can exchange it.
- It’s a New Skill: You need to learn the basics of how wallets, addresses, and networks work.
- Rules Can Be Unclear: The laws around crypto can be different depending on the country, which might make it hard for the receiver to exchange it for local cash.
- Mistakes Are Permanent: If you send money to the wrong address or use the wrong network, the transaction cannot be reversed, and the funds are lost for good.
A Simple Step-by-Step Guide to Sending Money
Let’s imagine you want to send money from the USA to a relative in Vietnam. Here is how you could do it.
- Get a Wallet. Both you and your relative need to set up a crypto wallet on a trusted platform.
- Pass a Security Check. Most reliable platforms require a “Know Your Customer” (KYC) check, where you verify your identity with a photo and an ID. This is a standard security step to prevent fraud.
- Buy a Stablecoin. On a peer-to-peer (P2P) platform, use your dollars to buy a stablecoin like USDT. You can choose a seller with a good reputation.
- Get the Recipient’s Address. Your relative will find their wallet’s “receive” or “deposit” address and send it to you. It will be a long string of letters and numbers. Double-check that it’s correct.
- Send the Crypto. In your wallet, choose the “send” or “withdraw” option. Carefully paste your relative’s address, enter the amount you want to send, and select the agreed-upon network (like TRC-20). Review all the details one last time before confirming.
- They Receive and Exchange It. The USDT will arrive in your relative’s wallet. They can then use a P2P platform in their country to sell the USDT for Vietnamese dong, which gets deposited into their local bank account.
The whole process can take as little as 10 to 30 minutes, making it a powerful way to send help quickly when it’s needed.