Remittance
A cross-border transfer of money from a person working in one country to a recipient in another, usually family.
The cost of a remittance is made up of the sending fee, the margin built into the exchange rate, and any cost the recipient pays to collect the money, and the middle component is often the largest and the least visible. Stablecoins can carry value across a border in minutes for a network fee unrelated to the amount sent, which addresses the transfer leg. The remaining legs are unchanged: the sender must convert local currency into the token, and the recipient must convert it back into spendable local money, which requires a licensed off-ramp or an agent network that may not exist in the destination country. The World Bank publishes corridor-by-corridor cost benchmarks that make these components comparable across methods.
En pratique
A transfer that arrives on chain within minutes still waits on the recipient's local exchange or agent to convert it into cash they can spend.
Le malentendu courant
A cheap on-chain transfer is not a cheap remittance; the full cost includes the currency conversion at both ends and the local cash-out.