BLOCKCHAIN TRADING DISRUPTS CURRENCY EXCHANGES
Say goodbye to forex spreads and broker commission
The new Blockchain Equitable Spread Trading system or BEST has banks and brokers in a tizzy. They’ve effectively been disintermediated, which is probably what they deserve, for years of fleecing consumers and investors.
Most of us, at one time or another, have had that uncomfortable feeling of chagrin, when faced with a bank or forex dealer’s spread of prices. “We buy US dollars at 0.89 euro and sell them at 0.98,” might be the typical offering. That’s a massive spread profit for simply performing the exchange.
Foreign Funds Transfer specialists were the first to exploit the iniquitous cost of moving money from one country to another. By netting off trades in both countries, they could offer mid-market rates and their low commissions ensured a high volume of largely automated transactions.
Credit card companies offered convenience, but their spread profits were simply hidden in the overall transaction margin, whether you were buying online or visiting foreign shores.
Now BEST beats them all at this game. Because the transaction is fulfilled and validated by the network itself, rather than a bank or broker, there’s no margin in the rate offered to buyer or seller; just a very small transaction fee, shared by both parties. That’s why it’s equitable. You can by euro today, and sell them tomorrow, at the same price, unless the rates have changed.
Major stock exchanges are resisting a blockchain system like BEST for shares. There are too many vested interests. But ultimately, brokers will be paid for their advisory expertise, and not for simply enabling a transaction. It’s happening already.
Links to related stories
- Skype For Cash: How TransferWise Is Upending The Way Consumers Move $3 Trillion Around The Globe - Forbes, 26 May 2016
- TransferWise money transfer services - The Telegraph
- MindBullet: BANKCHAIN FUELS THE VALUEWEB (Dateline: 9 March 2024, Published: 03 March 2016)
- MindBullet: BORDERS CRUMBLE, COUNTRIES MERGE AND SPLIT (Dateline: 28 October 2023, Published: 29 October 2015)
- MindBullet: WALL STREET HEARS THE CLOSING BELL – FOR THE VERY LAST TIME (Dateline: 15 March 2016, Published: 17 March 2011)
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