Understanding Cross Border Transactions With Bitcoin

Thursday, Jul 6, 2023

Bitcoin for International Transactions

In recent years, Bitcoin has emerged as a popular digital currency for international transactions. It offers users peer-to-peer transactions that are fast, secure, convenient, and often more affordable.

Cross-border transactions using Bitcoin refer to the practice of sending money across national borders using the digital currency, Bitcoin. This process leverages the unique properties of Bitcoin to enable fast, cost-effective global money transfers.

Benefits of Using Bitcoin for Cross-Border Transactions


Bitcoin’s decentralization allows them to operate independently of traditional banking systems, which charge exorbitant fees for international services. A single wire transfer can cost $50-$100, and the fees for Western Union and MoneyGram increases in concert with the amount being sent.

The average Bitcoin transaction fee is currently $2.30, which is a fraction of the cost of using traditional means.

We expect fees on Mintlayer’s special iteration of the Lightning Network to be a fraction of the cost of a Bitcoin transaction. Bitcoin with Mintlayer can do more without a trusted party. 


Traditional banking takes several days to complete a wire transaction. Bitcoin takes about 10 minutes. With the Lightning Network, Bitcoin and Mintlayer transactions settle almost immediately.


To send a wire transfer through a bank or Western Union, customers are required to fill out paperwork. It can take up to an hour to even begin a cross-border transaction, depending on how busy the bank is.

International transfers require additional paperwork, and bank employees are often unfamiliar with foreign banking conventions. 

With Bitcoin, an international transaction takes place exactly the same as a domestic transaction. A user that is already familiar with their chosen Bitcoin wallet will not be required to learn additional processes or steps. You can send funds within minutes anywhere there is an Internet connection.

Mintlayer will bolster this convenience with a special iteration of the Lightning Network. Users will send Bitcoin and the receiving party will be paid with a stable coin of their choice. The users do not even need to know the chosen currency of the other party.


Bitcoin transactions are final after settlement. Users do not have to worry about an institution’s banking practices and risk management because they are in charge of their own security.

Banks introduce more opportunities for human error. During a wire transfer a customer often fills out a form by hand, which is then input into the system by a bank teller. There are several opportunities for input errors.

Bitcoin is built on cryptography principles that have never been compromised. As one of the largest targets for hackers with a possible windfall of billions of dollars for anyone that successfully hacked the network, Bitcoin remains resilient because it is only as complex as it needs to be.


Users are less likely to have their funds frozen by a bank or government with a Bitcoin wallet. The Institute of Justice found that from 2002 to 2018, over $63 billion worth of government forfeitures were reported in the United States (their data is even incomplete, covering only 42 states in 2018).

Bitcoin is not subordinate to any government in the world. Authorities would need to have you voluntarily turn over your keys or engage in illegal means to access your Bitcoin. 

Challenges in Bitcoin Cross-Border Transactions

Despite the promising benefits, using Bitcoin for cross-border transactions still faces some challenges. 


The volatile nature of Bitcoin can affect the value of the money sent or received. Bitcoin’s volatility is decreasing as more Bitcoin is being used in finance and other real-world applications. Currently, the Bitcoin volatility index is at 1.5%. Bitcoin is becoming more stable every year. 

Ecosystems like Mintlayer, which need Bitcoin to run, also help with Bitcoin’s volatility. Users and possibly institutions will have Bitcoin locked in HTLC contracts for atomic swaps and use of Mintlayer’s Lightning Network. 

Government Regulation

The regulatory environment for cryptocurrency is evolving all around the world. Governments that take a negative stance on cryptocurrency could go as far as passing legislation that makes using Bitcoin illegal. 

In 2021, China banned participation in, holding, and trading cryptocurrency for their residents. China is now developing their own CBDC to compete with Bitcoin and the US dollar. 

A handful of other countries have followed suit. Cryptocurrency is outright banned or there are restrictions that make it functionally banned in:

  • Morocco
  • Egypt
  • Bolivia
  • Algeria
  • Bangladesh
  • Afghanistan
  • Nepal

Other countries like Saudi Arabia, Jordan, Taiwan, Vietnam and Argentina have banking bans that restrict cryptocurrency use by their citizens. 

In other countries, a lack of regulation and clarity has stifled innovation. When asked which cryptocurrencies were securities, Gary Gensler, the chairman of the US Securities and Exchange Commision, said “everything else other than bitcoin is a security”. Even though the US has pursued civil penalties against XRP and Binance, they acknowledge Bitcoin is a currency and that it’s protected by law. 

Until regulation is settled, users can’t be confident that their government will not interfere with transactions.

Mintlayer has specifically chosen countries like Dubai as a base for operations because their regulatory environment is crypto friendly. We chose to build on top of Bitcoin because it’s the one true digital currency that even hardcore critics do not deny its utility.

User Adoption

The vast majority of the public is still unfamiliar with the simple process of creating a Bitcoin wallet. Some users will not use Bitcoin because fiat is so ingrained in their lives. Where we see a wide array of Bitcoin users is in countries that have inflation issues. 

Some people will never use Bitcoin, but Mintlayer is working to make the process as user friendly as possible. With embedded features and a robust education program, Mintlayer is working to onboard as many people as possible to Bitcoin and the Mintlayer ecosystem. 

Real-World Applications of Bitcoin in Cross-Border Transactions

Many companies are already leveraging Bitcoin to facilitate cross-border transactions. These services replace traditional remittance services with blockchain-powered solutions, providing a new way for money to move across borders. 

Some countries, such as El Salvador and the Central African Republic, have adopted Bitcoin as an official currency. This has opened up foreign investment opportunities and created a micro-tourism industry based on Bitcoin. Other countries have not adopted such a positive stance, but immigrants all over the world use Bitcoin to send funds home to their families. 

Other governments have significant Bitcoin holdings. Bulgaria and Ukraine have the largest government holdings of Bitcoin, but many more governments have significant holdings because of asset seizures. These governments do not need to endorse Bitcoin to use it as a means of settlement between each other. 

The Future of Bitcoin in Cross-Border Transactions

As personal technology becomes more user friendly and Bitcoin’s volatility settles, we expect to see significant growth in use by immigrants and expatriates. No more $100 fees to send money home to their families. 

Institutional Bitcoin holdings are growing every day. As the Mintlayer ecosystem and other Bitcoin-centric applications continue to grow, volatility will continue to decline and the use case for Bitcoin as a global currency improves.