How can you use Ethereum for international transactions?
Whether you’re a multinational corporation, shipping company, cryptocurrency exchange or any number of other players in this space, the volatile international market is constantly changing. If you want to start bitcoin trading in only three steps, international payments can be complicated to make and costly to administer. They often rely on inefficient third-party processing intermediaries that may have limited access to specific markets and be subject to approval processes that can delay transactions.
That’s where Ethereum comes in by utilizing key capabilities from smart contracts with decentralized networks like the Ethereum blockchain; companies may implement cross-border payment solutions for faster transactions by bypassing traditional transfer methods such as wire transfers and international banks’ costlier services. Let’s discuss the use case of Ethereum in international transactions. Trading with Ethereum can be easy through a reliable trading platform.
Use case of Ethereum in international transactions:
The Ethereum blockchain and its innovative contract capabilities enable cross-border payments that don’t require a third party to execute each transaction because smart contracts can execute transfers without counterparty risk, complete transparency with all process steps, and significant speed improvements over existing solutions.
Furthermore, the ability of Ethereum to incorporate governance into its overall environment is a critical driving force for its growth in adoption. Ethereum’s open-source protocol is a significant advantage over other blockchain protocols when it comes to allowing the initiatives from both corporate and government stakeholders to be able to work together on interoperability solutions across borders.
Ethereum and blockchain technology have the potential to transform how cross-border payments are made, resulting in considerably lower costs, quicker transactions, greater transparency, and increased security.
Using ether for paying internationally:
The Ethereum network accepts ether as a form of payment, with the ability to pay using other national currencies. The decentralized nature of Ethereum means no payment processor, bank or intermediary between the sender and recipient of international payment.
It means there is no real need for a centralized third party; however, tracking and tax payments across countries is more difficult. The most common way to exchange ether into USD or other fiat currencies is through a cryptocurrency exchange. The list of platforms where you can exchange ether into other national currencies is extensive, and checking their user reviews is always a good idea.
You can also use online payment processors like BitPay and Coinbase. For example, if you deposit US dollars through BitPay, they will send ether to your balance in the Ethereum network. The best part about using ether for paying is that there are no transaction fees attached as it’s paid through the network and doesn’t go through any third party.
What are cryptocurrency payment processors?
Cryptocurrency payment processors or payment service providers (PSPs) are companies that allow customers to send and receive payments in cryptocurrency. PSPs can range from simple exchange platforms that allow customers to trade one cryptocurrency to another to full-service “gateway” providers like Coinbase, which provides an easy way for users to buy and sell ether, bitcoin, Litecoin and more and instantly converts the received digital currency into fiat currency.
Use of smart contracts in international transactions:
With smart contracts, companies can digitally sign and legally enforce agreements instantly and with no third party. The Ethereum network can execute legal contracts via smart contracts. It means that company agreements can be digitized and stored in a decentralized network, making them more accessible and increasing speed, transparency and cost-efficiency during transactions.
The smart contract enables faster transactions between two parties by removing the need for mediating third parties. For example, a payment to an employee by his employer could be automatically executed upon receipt of supplier invoices.
Other use cases of Ethereum:
As mentioned, the Ethereum blockchain can be used as a platform for organizations to exact security and transparency through smart contracts, which are stored and executed applications on the Ethereum network.
For example, as a global company, you could potentially provide certificates of authenticity for products created locally by scanning them into the blockchain via a QR code. Once scanned, this would create an immutable record of said products being made in your country, making it easier to track them throughout their supply chain journey.
Another everyday use case for the Ethereum blockchain is to provide a platform for you to build decentralized applications. It can be done in many ways, usually as an extension of your current software with a plug-in or as a standalone app. Most of the time, these apps will have to register themselves with the network to function correctly to be known as “dAPPs”. These are specific applications built on top of the Ethereum blockchain and are often built by community members.