How Kima Bridges Fiat and Crypto to Fix International Payments

International payments are plagued with high fees, long delays, and overregulation. Kima is ready to fix them.

Two very different planets connected by digital light waves in space.
Created by Gabor Kovacs from DailyCoin
  • International payment systems are complex and costly. 
  • Kima bridges fiat and crypto for international payments. 
  • Atomic swaps have several advantages over smart contracts.

Thanks to ever-deepening globalization, international payments are becoming increasingly important. However, the current cross-border payment system relies on infrastructure from decades ago. This results in high fees, including currency conversion and long transaction times. 

Thanks to the emergence of blockchain technology, this could change. Kima is a prominent protocol leveraging blockchain technology to fix how international payments work. 

Why Traditional Systems Are Failing

So far, traditional cross-border payments have relied on a network of banks that work as intermediaries. This system means that a transaction has to pass through several banks, each with its own rules and procedures.

Sponsored

These include anti-money laundering (AML) and know-your-customer (KYC) rules that change from one jurisdiction to another. This slows down the process, while bank, compliance, and currency conversion fees lead to high costs. 

This system is not only inefficient and costly. It also introduces bottlenecks, leading to a large number of errors. According to a PYMNTS report, the failure rate for international payments reached 11% in 2023. This cost businesses $3.8 billion in lost sales. 

This is why many businesses are looking at alternative ways of sending money abroad. This includes Bitcoin, stablecoins, and several crypto platforms for international payments. One of these is Kima, a platform that bridges crypto and fiat to make international payments seamless. 

How Kima Fixes International Payments

Kima offers a distinct approach to solving the inefficiencies of cross-border payments. It offers smooth transfers between fiat currencies, cryptocurrencies, and blockchains, using its Universal Payment Rail and Liquidity Cloud alongside Atomic Swaps. 

The Universal Payment Rail automatically allows transactions between bank accounts, wallets, and blockchains. This means that users donโ€™t have to convert currencies manually or rely on third parties. A key feature of this platform is that it is asset-agnostic, meaning it doesnโ€™t care what currency or blockchain is being used.

At the same time, the Liquidity Cloud pools liquidity from banks, cryptocurrencies, and blockchains. This pooled liquidity means that Kima can support transactions at a lower cost. Another key feature is its usage of atomic swaps, a peer-to-peer method for cross-chain transactions. This avoids smart contracts and cross-chain bridges, which are often weak points in blockchain security. 

This technology shows that international payments donโ€™t have to be as slow and costly as they are now. Critically, a more efficient system would be a great boon for international trade, which would translate into faster growth for the global economy. 

On the Flipside

  • Permissionless systems donโ€™t come with the same guarantees as traditional systems. Once a transaction goes through, itโ€™s final. This means that fat finger errors can cause substantial losses for users. 
  • Blockchain-based cross-border payments could face increased regulation in the future. This is particularly true for AML checks, which many crypto options currently bypass. Itโ€™s worth noting that Kima works with service providers to manage compliance in jurisdictions where it offers fiat access. 

Why This Matters

Most cross-border systems today require multiple intermediaries, which add fees, delays, and bottlenecks. Fixing these issues would be a major boon for international trade and the entire global economy.  

Read more about Kimaโ€™s features:ย 
Bridging Crypto and Fiat: Kimaโ€™s Innovative Direct Transfer System

Read more about the Cardano vs Solana rivalry:ย 
Cardano Founderโ€™s Takes a Subtle Jab at Solana Ahead of Breakpoint

This article is for information purposes only and should not be considered trading or investment advice. Nothing herein shall be construed as financial, legal, or tax advice. Trading forex, cryptocurrencies, and CFDs pose a considerable risk of loss.

Tags
Author
David Marsanic

David Marsanic is DailyCoinโ€™s journalist, focusing on Solana and crypto exchanges. David currently doesnโ€™t hold any crypto.

Read more