How to Use Crypto to Send Money to Anywhere in the World

Learn to transfer money quickly using crypto wallets. Explore the ease of sending cryptocurrencies, exchanging with banks, and navigating the digital currency sector effortlessly

December 27, 2023

How to use crypto to send money
Author
Shashank Kothari
No items found.

The adoption and use of cryptocurrency have been rapidly growing. According to Exploding Topics, there are over 295 million users worldwide. Statista noted a nearly 190% increase in user base between 2018 and 2020, a growth that further accelerated in 2022. You can use crypto for many purposes, including investment, online purchases, and sending cash abroad. However, a survey of 1,000 people across the U.S., Mexico, and Brazil showed that 98% do not understand basic crypto concepts, which means many don’t know how to use it.

Cryptocurrency, or crypto, is a digital or virtual currency secured by cryptography. This makes it nearly impossible to counterfeit or double-spend. It is made to work as a medium of exchange, and many cryptocurrencies are built on blockchain technology, a distributed ledger enforced by a network of computers.

Sending cash abroad using crypto has many advantages, and a lot of people are adopting this method. So, as it continues to rise, it is crucial for you to know the fundamentals of crypto wallets and transfers. This is essential for securely and efficiently navigating the process of sending money abroad using cryptocurrency. Read on to find out the steps and considerations for using crypto to send money abroad. This will empower you to take advantage of the benefits presented by this rapidly evolving financial sector.

What Is a Cryptocurrency Wallet?

How crypto wallet works
How crypto wallet works. Source: Blockchain Simplified

A crypto wallet is like a digital bank account. It stores the "keys" you use to access and manage your cryptocurrencies. These keys are not like the ones you use to open a door; they are long, complex codes that allow you to send, receive, and spend your digital money. 

Just as you wouldn't leave your cash lying around, you need to keep your crypto keys safe. If you lose your keys, you lose access to your money. There are different crypto wallets, such as hardware wallets that look like USB sticks and software wallets that you can use on your computer or phone. Choosing a wallet that fits your needs and keeping your keys secure is important.

Types of Crypto Wallets

Cryptocurrency wallets come in different forms to cater to different user preferences and security needs. Here are the main types:

1. Paper Wallets

A paper wallet is a tangible form of cryptocurrency storage, typically in the form of a physical printout or document. Your private and public keys are generated and printed, offering an offline, secure storage method. It has enhanced security as it's offline, protecting against online threats. However, its physical nature makes it susceptible to damage or loss. 

2. Software Wallets

Software wallets are digital applications or programs made to manage and store cryptocurrencies on your electronic devices. These wallets offer convenience and accessibility. Examples include mobile wallets like Trust Wallet or desktop wallets such as Electrum

With a software wallet, you can quickly access your funds, and this makes it suitable for regular transactions. However, since it's connected to the internet, there's a potential exposure to online threats. 

3. Hardware Wallets

Hardware wallets are physical devices that are made to store and secure cryptocurrencies offline. Examples are Ledger Nano S and Trezor. In your possession, these devices safeguard your private keys from online threats. Using a hardware wallet enhances security as it remains immune to malware or hacking attempts. However, ensure the physical safety of the device as loss or damage may lead to fund inaccessibility. 

4. Hot Wallets

The hot wallet is an online cryptocurrency wallet connected to the internet. It provides quick access to regular transactions. Examples include online exchanges like Coinbase and mobile wallets such as Blockchain Wallet. As a user, you benefit from the convenience of immediate fund access, which makes hot wallets suitable for everyday use. However, again, being connected to the internet exposes it to potential cyber threats. 

5. Cold Wallets

These are not connected to the internet and are suitable for long-term investment. They can be paper wallets or hardware wallets.

Importance of Choosing the Right Wallet

Choosing the right crypto wallet is crucial for safeguarding your digital assets and ensuring a smooth user experience. It's essential to consider factors such as security, ease of use, compatibility with different cryptocurrencies, and fees associated with using the wallet. Users generally prefer non-custodial wallets because it allow you to control your private keys and funds. 

Choosing a wallet that aligns with your preferred device, whether mobile, desktop, or both, is essential. Also, research the wallet's reputation, trustworthiness, and the development team behind it to ensure a reliable and secure experience. By carefully considering these factors, you can choose the right crypto wallet for your needs and provide the safe storage of your digital assets.

Top Cryptocurrency Platforms to Easily Send Money to Anywhere in the World

Several options offer simplicity and efficiency when considering cryptocurrency platforms to send money. Here are the five best platforms:

  • Coinbase. Coinbase is a user-friendly platform that allows you to buy and send various cryptocurrencies anywhere in the world. With fees around 0.5%, transactions usually take 15 minutes to an hour.
  • Binance. Binance is known for its global reach and supports multiple cryptocurrencies with fees ranging from 0.1% to 0.5%. Transactions are completed within 10 to 30 minutes.
  • Kraken. Kraken is a secure platform supporting various cryptocurrencies and charges fees starting at 0.26% to send cryptocurrencies anywhere. Transactions typically take 15 to 30 minutes.
  • Gemini. Gemini, emphasizing security and compliance, supports various cryptocurrencies with transaction fees starting at 0.5%. Transactions are usually processed within 10 to 15 minutes.
  • Bitstamp. Bitstamp, one of the oldest exchanges known for reliability, supports various cryptocurrency transfers worldwide. With transaction fees ranging from 0.1% to 0.5%, it generally takes 15 to 30 minutes.

The Top Cryptocurrencies That Can Be Transferred

Cryptocurrencies that can be transferred vary widely, offering diverse options for users. Some notable ones include:

Bitcoin (BTC)

Bitcoin is a digital currency invented in 2008 by an unknown person or group of people using the name Satoshi Nakamoto. It is the first and most well-known cryptocurrency, with a current market capitalization of over $860 trillion. Bitcoin has a limited supply of 21 million coins, and as of November 2023, over 19 million have been mined.

Ethereum (ETH)

Ethereum is a decentralized blockchain platform that allows developers to create decentralized applications (DApps) and smart contracts. It was invented in 2015 by Vitalik Buterin and has since become a global innovation in the crypto space. Ethereum is not just about its native cryptocurrency, Ether (ETH), but also about its blockchain technology, which enables the creation of various digital assets and applications like Uniswap (UNI) and Chainlink (LINK). 

With a market capitalization of over $269 billion, Ethereum is the second most valuable cryptocurrency after Bitcoin. It has a strong community of developers and users, about 252.56m wallets. Its blockchain technology is the backbone of many promising projects in the crypto and blockchain industries.

Ripple (XRP)

Ripple is a digital payment protocol created in 2012 by Chris Larsen and Jed McCaleb. It aims to give fast, low-cost, cross-border payment transactions. Ripple's native cryptocurrency, XRP, is used to facilitate these transactions and acts as a bridge between different fiat currencies. With its focus on real-time gross settlement systems, currency exchange, and remittance networks, Ripple has gained popularity among financial institutions and payment providers. As of the latest data, Ripple has over 5 million users worldwide.

Litecoin (LTC)

Litecoin is a decentralized digital currency that was created in 2011 by Charlie Lee, a former Google engineer. It is often referred to as the silver to Bitcoin's gold and is one of the oldest and most popular cryptocurrencies. Litecoin is made to be faster and cheaper than Bitcoin, with a block time of 2.5 minutes compared to Bitcoin's 10 minutes. 

As of November 2021, Litecoin has a market capitalization of over $5.28 billion and over 74 million coins in circulation. Litecoin can be purchased through various cryptocurrency exchanges and wallets, making it accessible to a wide range of users.

Bitcoin Cash (BCH)

Bitcoin Cash was created in 2017 due to a "fork" from the original Bitcoin blockchain. A fork is when a group of developers and users create a new version of the software that was previously shared. Bitcoin Cash is a decentralized digital currency that allows users to send and receive transactions using cryptography. 

It has a market capitalization of over $4.62 billion and over 19.59 million coins in circulation. It is one of many cryptocurrencies that aim to provide fast and affordable transactions, and this makes it an attractive option for everyday transactions and remittances.

Tether (USDT)

Tether is known as a stablecoin, which is pegged to a fiat currency, in this case, the US dollar. It was developed in 2014 and is one of the earliest stablecoins, with a market capitalization of about $91 billion, making it the fourth largest cryptocurrency. 

Tether is designed to maintain a 1:1 value with the US dollar, providing stability and a reliable medium of exchange within the volatile crypto market. 1 Tether is always worth about $1.00, and it is widely used for trading and as a safe haven for crypto investors during market downturns.

How to Send Money Worldwide Through Cryptocurrency Platforms Like Binance

Here's a step-by-step guide on how to send money anywhere in the world using crypto. Note that we will be using Binance in this guide. If you are using another exchange, you can still follow these steps as they are almost the same:

Step 1: Create a Binance Account

If you don't have a Binance account, go to Binance's official website and sign up. Provide the necessary information and follow the verification process to secure your account.

Step 2: Verify Your Identity

Complete the identity verification process on Binance or any other exchange of your choice, which typically involves submitting a photo of your ID or passport. This step is crucial for security and compliance.

Step 3: Deposit Local Currency

Once your account is verified, click on the "Wallet" on Binance. Choose the option to deposit funds and select your local currency. Follow the instructions to deposit money into your Binance account.

Step 4: Buy Cryptocurrency

After depositing funds, go to the "Buy Crypto" section. Choose the cryptocurrency you want to use for the transfer. For example, select Bitcoin (BTC) since it's widely accepted.

Step 5: Specify Amount and Payment Method

Enter the amount of local currency you want to convert into Bitcoin. Choose your preferred payment method, which could be a bank transfer or credit/debit card, and complete the purchase.

Step 6: Navigate to "Fiat and Spot"

Once your cryptocurrency purchase is confirmed, go to the "Fiat and Spot" section on Binance or any other currency of your choice. Here, you'll see your available cryptocurrency balance.

Step 7: Trade to USDT (Tether)

To send a stable value to the recipient, convert your cryptocurrency to a stable coin like USDT (Tether). Find the trading pair for the cryptocurrency you bought and USDT. Initiate the trade and confirm.

Step 8: Withdraw to External Wallet

Go to the "Withdraw" section on Binance. Select USDT as the cryptocurrency to withdraw and provide the external wallet address where you want to send the funds. Also, provide the network of the address. Double-check the address for accuracy.

Step 9: Confirm Withdrawal

Review the withdrawal details, including fees. Confirm the withdrawal, and Binance will process the transaction.

Step 10: Receive Funds in the External Wallet

Wait for the funds to reach the external wallet. Transaction times can vary based on blockchain activity, the exchange, and network congestion.

Pros of Sending Money Through Cryptocurrency

There are so many benefits to sending money through crypto. Below are some of these:

  • Speed. Cryptocurrency transactions often occur faster than traditional methods, especially for cross-border transfers.
  • Cost-effective. Cryptocurrency transactions are more affordable, with lower fees than traditional banking systems.
  • Accessibility. Cryptocurrencies provide financial inclusion, allowing those without access to conventional banking services to participate in the global economy.
  • Decentralization. A central authority does not control transactions. This helps reduce the risk of interference or censorship.
  • Security. Cryptographic technology enhances the security of transactions, making it challenging for unauthorized access or fraud.
  • Global transactions. Cryptocurrencies facilitate international transfers without the need for currency conversions, overcoming traditional banking limitations.
  • 24/7 availability. Cryptocurrency transactions can be conducted at any time, providing flexibility beyond traditional banking hours.

Cons of Sending Money Through Cryptocurrency

Sending money through crypto also has its concerns, and below are some of these:

  • Volatility. Cryptocurrencies, such as Bitcoin, can experience significant price volatility, which leads to uncertainty about the final value of the transferred amount.
  • Limited acceptance. Not all businesses or individuals accept cryptocurrencies, limiting the practical usability of funds received in this form.
  • Learning curve. Dealing with cryptocurrencies requires understanding blockchain technology for the sender and the receiver. This may pose a learning curve for those unfamiliar with the technology.
  • Regulatory uncertainty. Cryptocurrency regulations can be unclear or subject to change, potentially impacting the legality and ease of transactions.
  • Security concerns. While blockchain is secure, the broader cryptocurrency ecosystem may still be susceptible to hacking and fraud, posing risks to your funds.
  • Dependency on technology. Cryptocurrency transactions depend on internet access and technology infrastructure, which may not be universally available in all regions.
  • Limited reversibility. Cryptocurrency transactions are often irreversible; if an error occurs, it may be challenging to recover the funds.
  • Exchange rate risks. Fluctuations in cryptocurrency values may bring exchange rate risks, affecting the final amount the recipient receives.

Steps on Converting Cryptocurrency to Fiat Currency

 Definition of fiat currency
Definition of fiat money or currency. Source: Investopedia

Converting cryptocurrency to fiat currency (dollars, pounds, euros, etc.) involves several steps. Here's a simplified guide:

  1. Choose a cryptocurrency exchange. Select a reputable cryptocurrency exchange, like Coinbase, that supports the cryptocurrency you receive and allows fiat withdrawals.
  2. Create an account. If you don't have an account on the chosen exchange, sign up and complete the necessary verification process.
  3. Deposit cryptocurrency. Transfer the cryptocurrency you received to your exchange wallet.
  4. Select fiat currency. Choose the fiat currency (e.g., USD, EUR) to which you want to convert your cryptocurrency.
  5. Place a sell order. Set up a sell order indicating the amount of cryptocurrency you want to convert and the desired price.
  6. Execute the sell order. Confirm and execute the sell order when market conditions are favorable.
  7. Withdraw fiat currency. Once the sell order is completed, withdraw the converted fiat currency to your linked bank account.
  8. Verify and monitor. Verify the transaction details and monitor your bank account for the arrival of the converted funds.

How to Ensure the Security of Your Crypto Transactions

More than 46,000 people reported losing $1 billion in crypto to various scams from January 2021 through mid-2022. This means making sure your cryptocurrency transactions are secured is crucial. Even though there has been some excellent news, as Chainalysis noted that through the end of June 2023, crypto scammers have pulled in 77% less revenue than they did through June 2022, it is still necessary to stay vigilant. Here are simple steps to enhance security:

  • Use reputable wallets. Choose well-established and reputable wallets for storing your cryptocurrencies. Consider hot or software wallets for enhanced security.
  • Enable two-factor authentication (2FA). Activate 2FA on your accounts and wallets to add an extra layer of protection. This typically involves a secondary verification method, like a code from a mobile app.
  • Keep software updated. Regularly update your wallet software, exchange platforms, and related applications to benefit from the latest security patches.
  • Secure private keys. Safeguard your private keys offline and avoid sharing them. Use hardware wallets or secure storage methods like paper wallets.
  • Beware of phishing attempts. Be cautious of phishing emails or websites. Double-check URLs, use official websites and avoid clicking on suspicious links.
  • Secure your devices. Keep your computer, mobile devices, and other hardware secure with up-to-date antivirus software and firewalls.
  • Verify addresses. Double-check the recipient's cryptocurrency address before initiating a transaction to prevent sending funds to the wrong destination.
  • Use secure networks. Avoid conducting cryptocurrency transactions on public Wi-Fi networks. Use secure and private networks to reduce the risk of unauthorized access.
  • Diversify storage. Consider diversifying your storage methods. Use a combination of hot wallets for daily transactions like sending money and cold storage (hardware or paper wallets) for long-term holdings.
  • Regularly monitor accounts. Keep a close eye on your cryptocurrency accounts and transaction history. Report any suspicious activities to the platform immediately.

The Future of Cryptocurrency and its Potential Impact on the Financial Industry

According to Statista, the revenue in the cryptocurrency market is about $40.7 billion in 2023, with an anticipated annual growth rate (CAGR 2023-2028) of 11.98%. It will likely result in a projected total of $71.7 billion by 2028. This shows that the future of cryptocurrency is bright, with its potential to revolutionize the financial industry. 

Cryptocurrency usage and acceptance will likely improve, supporting the industry's growth trajectory. It can potentially provide financial services to the unbanked and underbanked populations worldwide. This will make it even easier to send money through crypto. Many experts predict significant growth and adoption. For example, Kate Leaman, Chief Market Analyst at AvaTrade, predicts an astounding tenfold increase in the global crypto market cap. In her words: “Many experts are predicting an astounding tenfold increase in the global crypto market cap, pushing its value past $2.2 trillion. This leap in crypto’s value is expected to be fuelled by wide-scale cryptocurrency adoption, potentially as many as one billion people joining the digital asset revolution”. This shows there could be more adoption, especially in the gig economy.

Financial institutions are exploring using blockchain technology to upend traditional banking structures, giving people and businesses new creative ways to manage their money. Cryptocurrencies will likely gain mainstream acceptance and attract even more capital, making its future exciting for enthusiasts. As the crypto market grows, it's crucial to stay current on the latest trends and developments to make the best possible decisions when sending money through crypto.

Author
Shashank Kothari
F4P Contributor

My goal is to empower readers with insightful blogs that explore future trends, provide practical guidance, and spark curiosity. Together, let's navigate the path to personal and professional growth in an ever-changing world.

Learn more
No items found.
Subscribe to our newsletters

Stay ahead of the curve. Subscribe to our newsletter and receive exclusive insights, future trends, and expert knowledge delivered straight to your inbox.

Subscribe to our newsletters

Stay ahead of the curve. Subscribe to our newsletter and receive exclusive insights, future trends, and expert knowledge delivered straight to your inbox.

Latest Posts

Blog details image
Shashank Kothari
Arrow Icon
10 Social Media Platforms for Photographers to Get Notices and Earn More Clients

Find out how social media empowers photographers to showcase their talent and reach a wider audience. Ready to stand out in the digital sector? Read up.

Blog details image
Anita Kaswa
Arrow Icon
5 Best Skills Tracking Software in 2024 to Help Team Members Reach Their Full Potential

Unlock your team's potential with these skills tracking software. How can you bridge skill gaps and boost productivity effectively? Find out here!

Blog details image
Shashank Kothari
Arrow Icon
Top 23 AI-Powered Productivity Tools in 2024 to Beat Your To-Do List Faster

Unlock efficiency with these AI-powered productivity tools! Streamline tasks, boost productivity, and stay ahead of the curve.