Uniswap, in a recent press report, made a couple of suggestions for the FX market. There is a possibility that the responsibilities on one side of an agreement that has not yet been concluded will not be honored in the daily transactions involving foreign currency (FX) that are worth around $2.2 trillion.
What does Uniswap suggest?
On the other hand, recent research compiled by Circle Internet Financial and the decentralized exchange Uniswap Labs suggests that the problem might be overcome by using simultaneous settlement in conjunction with a distributed ledger.
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
Several researchers from the two digital-finance companies, including Circle’s chief economist Gordon Liao and Uniswap’s Chief Operating Officer Mary-Catherine Lader, believe that developments in the cryptocurrency space may provide a solution to the primary ongoing concern that regulators have regarding the stability of the financial system. This is one of the conclusions that they came to after reading their 20-page report, which is going to be delivered at an event that Circle is sponsoring on Thursday in conjunction with the World Economic Forum in Davos.
“On-chain FX may allow speedier and more cost-effective transaction operations, as well as greater liquidity and stability,” the paper says.
Uniswap: DeFi could help cut the cost of remittances by 80%
According to the findings of the study, decentralized financial systems have the potential to reduce the costs of remittances, which are defined as the transfer of money across international borders, by up to 80 percent. (DeFi). The lower cost of moving money overseas has long been one of the most persuasive arguments in favor of cryptocurrencies; according to the report, this might result in an additional $30 billion remaining in people’s wallets each year.
The publication of this paper comes at a time when the reputation of blockchain and other cryptographic technologies is suffering as a result of a severe crypto winter and the closure of FTX and Sam Babkman-Fried’s fall. One of the largest and most recognized companies in the industry. Particularly in the last few months, authorities and the biggest corporations in the traditional financial system have been reluctant to exhibit enthusiasm for fresh ideas. This reticence has been especially prevalent in recent months.