Coinbase Earn: Sending Remittances With Stellar (Lesson 3 of 5)

This is Maria. She lives in the United States. And this is Maria's mom, Paulina. She lives in the Philippines.
Today Maria wants to send her mom $20. This is called a remittance. Remittances are money
sent to support a family member in another country. And they are a very big deal. The World Bank estimates
that global remittances are over 600 billion
US dollars every year. Unfortunately for Maria,
sending a remittance is pretty expensive. Her bank in the US
has no connection to her mom's bank
in the Philippines, so she has to use a money
transfer service. Which means paying a lot of fees. One popular American service
charges a 3% conversion fee. And the transfer takes
three to four days. The same service also offers
to do the transfer faster, but for an additional
fee of $9.99. If Maria used this
service to send $20, it would mean half the
amount would be spent on fees. That's a huge percentage. And Maria and Paulina are not alone. The average fee
globally for remittances is 7.1% of the transaction. And there are millions of people
who pay these fees every day. But what if Maria used Stellar? Stellar is a decentralized platform that unites banks, payment
systems, and people so they can easily move
money anywhere in the world. If Maria used Stellar to
send her $20 to Paulina, the Stellar network would
convert her US dollars to Philippine Pesos in
less than five seconds. So Paulina would receive $20
worth of her local currency. Not $20 minus fees. Stellar makes this
possible by connecting financial institutions to
the Stellar network which has a built-in order book
that exchanges assets. So Maria could send US
dollars — or any other currency — to her mom, and it's
converted automatically to Philippine Pesos. That's the vision of Stellar.

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