TITLE:
Blockchain-Based System for Secure and Efficient Cross-Border Remittances: A Potential Alternative to SWIFT
AUTHORS:
Omoshola S. Owolabi, Emmanuel Hinneh, Prince C. Uche, Nathaniel T. Adeniken, Jennifer A. Ohaegbulem, Samuel Attakorah, Oluwabukola G. Emi-Johnson, Chinaza S. Belolisa, Harold Nwariaku
KEYWORDS:
Interoperability, Tokens, AML/KYC Compliance, Peer-to-Peer Transfers, Financial Inclusion
JOURNAL NAME:
Journal of Software Engineering and Applications,
Vol.17 No.8,
August
28,
2024
ABSTRACT: This paper proposes a blockchain-based system as a secure, efficient, and cost-effective alternative to SWIFT for cross-border remittances. The current SWIFT system faces challenges, including slow settlement times, high transaction costs, and vulnerability to fraud. Leveraging blockchain technology’s decentralized, transparent, and immutable nature, the proposed system aims to address these limitations. Key features include modular architecture, implementation of microservices, and advanced cryptographic protocols. The system incorporates Proof of Stake consensus with BLS signatures, smart contract execution with dynamic pricing, and a decentralized oracle network for currency conversion. A sophisticated risk-based authentication system utilizes Bayesian networks and machine learning for enhanced security. Mathematical models are presented for critical components, including transaction validation, currency conversion, and regulatory compliance. Simulations demonstrate potential improvements in transaction speed and costs. However, challenges such as regulatory hurdles, user adoption, scalability, and integration with legacy systems must be addressed. The paper provides a comparative analysis between the proposed blockchain system and SWIFT, highlighting advantages in transaction speed, costs, and security. Mitigation strategies are proposed for key challenges. Recommendations are made for further research into scaling solutions, regulatory frameworks, and user-centric designs. The adoption of blockchain-based remittances could significantly impact the financial sector, potentially disrupting traditional models and promoting financial inclusion in underserved markets. However, successful implementation will require collaboration between blockchain innovators, financial institutions, and regulators to create an enabling environment for this transformative system.