If the foreign exchange market starts using DeFi protocols instead of the current centralized systems, the cost of remittances could be reduced by “as much as 80%,” according to a Jan. 19 paper jointly published by researchers at Circle and Uniswap.
On-chain foreign exchange (FX) is a new model of global value exchange that offers a faster, cheaper, and more efficient alternative for cross-border payments.
— Uniswap Labs (@Uniswap) January 19, 2023
The paper, titled “On-chain Foreign Exchange and Cross-border Payments,” was written by Uniswap Data Scientist Austin Adams, Circle Chief Economist Gordon Liao, Mary Catherine Lader, David Puth, and Xin Wan.
The authors studied trading activity of Circle’s US Dollar Coin (USDC) and Euro Coin (EUROC) on Uniswap from