Blockchain Remittance System with Dynamic Exchange Routing
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Solution Overview
Problem
Existing fiat currency conversion and transfer processes are inefficient, costly, and cumbersome due to high fees and regulatory complexities, particularly for international remittances, which burden both individuals and corporations.
Innovation Solution
A blockchain-based system with multiple cloud-based remittance services instances in the sender's and recipient's countries facilitates near-instant and low-fee conversions by pooling cryptocurrencies, using stable coins, and directly transferring fiat currency to the recipient's account through a network of exchanges with the lowest conversion rates.
Engineering Contradictions & Design Principles
Engineering Contradiction Analysis
1Reliability
If traditional financial institutions handle fiat currency conversions and transfers, then regulatory compliance is maintained, but high fees are charged and the process is cumbersome
Solution Approach 1:
The system divides the remittance process into separate functional segments: cryptocurrency transfer from sender to exchange, currency conversion at the exchange, and fiat currency transfer to recipient. This segmentation allows each component to be optimized independently while maintaining overall efficiency and compliance.
Solution Approach 2:
The patent introduces cryptocurrency exchanges as intermediary entities between senders and recipients in different countries. These exchanges facilitate currency conversion and transfer while operating under regulatory frameworks, thus maintaining compliance while simplifying the process for users.
2Adaptability or versatility
If multiple exchange steps are used in international remittances, then currency conversion is achieved, but multiple fees are accumulated and time is consumed
Solution Approach 1:
The system merges the cryptocurrency transfer and currency conversion functions into a single integrated process. By combining these steps and eliminating intermediate manual interventions, the system reduces both time consumption and cumulative fees while maintaining versatile currency conversion capabilities.
Solution Approach 2:
The automated remittance system maintains continuous operation without interruptions. Once initiated, the process flows automatically through cryptocurrency transfer, conversion, and fiat transfer steps without requiring manual intervention or waiting for sequential processing, thus reducing total transaction time.
3Stability of the object's composition
If financial institutions maintain existing workflows, then operational stability is preserved, but fee structures remain lucrative and inefficient
Solution Approach 1:
The system changes key parameters of the remittance process: converting from traditional fiat-based transfers to cryptocurrency-based transfers, automating manual processes, and implementing dynamic fee structures. These parameter changes maintain operational stability through regulated exchanges while significantly improving remittance efficiency and reducing costs.
Data Source
AI summary
Instances of a cloud-based service are provided. A first instance resides in a sender's country associated with a sender of a remittance; a second instance resides in a recipient's country associated with a recipient of the remittance. The sender provides the first instance a financial account of the recipient in the recipient's country. The sender sends an amount of cryptocurrency from a sender's wallet to a custodial wallet of the sender that is maintained by the first instance in a pooled wallet. While the transfer is pending on a blockchain (BC), the pooled wallet is used by the second instance to locate an exchange with a lowest conversion rate for redeeming the amount into a fiat current associated with the recipient's country. The amount is redeemed through the exchange and while the exchange is pending the second instance transfers the fiat currency directly to the recipient's financial account.