Island Pay, a Bahamas-based fintech company, has stepped forward with an innovative solution to address the high costs and challenges associated with traditional remittances. However, the company recently unveiled its digital wallet, “CiNKO,” tailored for users in Latin America and the Caribbean. CiNKO will utilize Circle’s USDC stablecoin as its primary currency, offering an alternative payment method for individuals in more than 30 countries. The wallet’s features include funding prepaid cards, conducting transactions with merchants, and facilitating peer-to-peer payments, even for those without a bank account.
Island Pay’s Chief Executive Officer, Richard Douglas, emphasized the company’s commitment to advancing financial inclusion in the region, catering to banked and unbanked populations. With a growing ecosystem of merchants accepting USDC and the stability of the stablecoin itself, the CiNKO wallet aims to overcome some of the key barriers traditional cryptocurrencies face, such as wild rate swings.
Crypto remittance to revolutionize financial inclusion in Latin America
The push for stablecoins and decentralized finance protocols in Latin America forms part of the broader effort to reshape the remittance landscape. According to Circle’s Chief Business Officer, Kash Razzaghi, implementing such technologies could potentially reduce the cost of remittances by a staggering 80%. This comes at a time when the region has experienced a surge in remittances, with an increase of 27% in 2021 and 11% in 2022, reaching a total of $145 billion last year. Although the growth rate is expected to slow to 3.3% in 2023, remittances are still projected to reach an all-time high.
One of the main challenges faced by crypto remittances in the region is the ease of converting cryptocurrencies to local currencies, especially in countries with limited places to spend tokens like Bitcoin or Ether.
However, the use of USDC, which is pegged to the US dollar and maintains a one-to-one value with it, mitigates the volatility concerns that plague traditional cryptocurrencies. As a result, the immediate usability of CiNKO’s USDC balance, transferable onto a prepaid card, provides a user-friendly and accessible solution for individuals in the Caribbean and Latin America.
Island Pay’s foray into the crypto remittance space is expected to resonate with users in Central and South America, where the company aims to onboard around 100,000 users by next year. Founded in 2016, Island Pay has already established itself as a player in the Caribbean’s digital payment services, and it was one of the early companies to work with a central bank digital currency when it collaborated with the Bahamas’ Sand Dollar in 2021.
Despite the progress made by crypto remittance solutions, traditional financial intermediaries still pose challenges for individuals seeking cost-effective and swift cross-border transactions. However, the advent of cryptocurrencies in the remittance landscape presents a promising opportunity to revolutionize financial inclusion, providing low-income earners and migrants with a more affordable and efficient option to send money back home.
