• Researchers from Circle and Uniswap have found that decentralized foreign exchange (FX) protocols could reduce the cost of remittances by up to 80%.
• 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 the trading of USDC and EUROC stablecoins on Uniswap and compared the results to World Bank estimates of the average cost of remittances.

A recent paper, jointly published by researchers from Circle and Uniswap, has found that decentralized foreign exchange (FX) protocols could reduce the cost of remittances by up to 80%. Titled “On-chain Foreign Exchange and Cross-border Payments,” the paper was written by Uniswap Data Scientist Austin Adams, Circle Chief Economist Gordon Liao, Mary Catherine Lader, David Puth and Xin Wan.

The authors studied the trading of USDC and EUROC stablecoins on Uniswap and compared the results to World Bank estimates of the average cost of remittances. They found that using a decentralized protocol for FX could potentially reduce the cost of remittances significantly.

The paper also discussed how decentralized protocols are more secure than their centralized counterparts, as they eliminate the need for intermediaries and make use of cryptographic protocols to ensure the security of transactions. This means that users can trust that their transactions will not be tampered with or manipulated.

The authors also touched on how decentralized protocols offer faster settlement times than their centralized counterparts, as they can be processed almost instantly without the need for a third-party to process the transaction. This could lead to a faster, more efficient global remittance system.

Overall, the authors concluded that decentralized FX protocols could have a major impact on the global remittance system, reducing the cost and improving the efficiency of cross-border payments. The potential for such protocols to reduce the cost of remittances could be immense, and could have a major impact on the global financial system.

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