Hard vs. Local Currency

Institutions often debate the benefits and drawbacks of remitting payments in hard currency versus local currency in developing countries. StoneX Financial Ltd has extensive worldwide experience in both methods, and based on that experience, we believe that local currency payments serve our customers best. Here’s why:

Captive Client

By sending hard currency directly to the beneficiary bank for conversion locally, an organization potentially opens itself up to uncontrolled loss and relies on the local bank as its sole rate source. In many cases, the bank then converts the funds at the rate of the day, which is usually much less favorable than what can be attained by soliciting competitive bids. In fact, it is not uncommon for the difference to be as much as 5 percent – and, in some cases, even more. In addition, there are added fees associated with sending hard currency to be converted locally. As a result, it is more advantageous to fund in local currency, thereby ensuring access to competitive rates and maximum levels of funding for field projects.

Financial Controls

The financial markets and banking systems in many developing countries are inherently volatile and can be negatively impacted by political instability, corruption and perpetual underdevelopment. Therefore, maintaining large sums of hard currency in-country leads to many potential complications including misappropriation of funds, substantial country and credit risk, and an overall lack of accounting transparency. By transacting in the international market for local currency, the funding and accounting process is made more secure and accurate while reducing the potential for corruption and fraud.

Compliance Risk

Global compliance standards have been raised significantly in recent years. With the introduction of new laws and regulations in many countries worldwide, organizations must be aware of and adhere to current regulations regarding international currency transfers. By actively monitoring the currency exchange process from its head office, an organization can ensure not only that it is compliant but also that all financial dealings are undertaken with approved counterparties.

 


Meet the Team

London, England
Moor House, 1st Floor
120 London Wall
London EC2Y 5ET
Tel: +44 20 3580-6000

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230 Park Avenue
10th Floor
New York, NY 10169
Tel: +1 (212) 485-3549
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Amsterdam
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Tel: +31 20 799 7660

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TaunusTurm, Taunustor 1
D-60310 Frankfurt am Main, Germany
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Sydney, Australia
Suite 28.01
264 George Street
Sydney NSW 2000
Australia
Tel: +61 (02) 8094 2000

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The information in this section is intended to be a description of the StoneX Global Payments services and shall not be deemed to be an offer for the sale or purchase of any financial services product transaction or advice. It is provided on an ‘as-is’ basis and no warranty, whether express or implied, is given as to its completeness or accuracy.

2022 © StoneX Financial Ltd (“SFL”) all rights reserved, is registered in England and Wales, company no. 5616586. SFL is authorised and regulated by the Financial Conduct Authority (registration number FRN:446717) to provide to professional and eligible customers including: arrangement, execution and, where required, clearing derivative transactions in exchange traded futures and options. SFL is also authorised to engage in the arrangement and execution of transactions in certain OTC products, certain securities trading, precious metals trading and payment services to eligible customers. SFL is authorised & regulated by the Financial Conduct Authority under the Payment Services Regulations 2017 for the provision of payment services. SFL is a category 1 ring-dealing member of the London Metal Exchange. In addition SFL also engages in other physically delivered commodities business and other general business activities which are unregulated and not required to be authorised by the Financial Conduct Authority.This document and the information herein is provided confidentially for information purposes only to the recipient and shall not be deemed to be an offer for the sale or purchase of any financial services product transaction or advice. This information is provided on an ‘as-is’ basis and may contain statements and opinions of the Company as well as excerpts and/or information from public sources and third parties  and no warranty, whether express or implied, is given as to its completeness or accuracy. The Company (on its behalf and on behalf of its group, directors, employees and agents) disclaims any and all liability as well as any third party claim that may arise from the accuracy and completeness of the information detailed herein, as well as the use of or reliance on this information by the recipient, any member of its group or any third party. The StoneX group of companies provides financial services worldwide through its subsidiaries, including physical commodities,  securities, exchange-traded futures and options and over-the-counter (“OTC”) instruments, risk management and advisory services, global payments and foreign exchange products in accordance with applicable law in the jurisdictions where services are provided.  The Company provides Global Payments services using its agents: StoneX Group Inc in the United States of America and StoneX APAC Pte Ltd in Singapore. 

StoneX Financial Pte Ltd (Co. Reg. No 201130598R), a subsidiary of StoneX Group Inc., holds a Capital Markets Services Licence regulated by Monetary Authority of Singapore for Dealing in Exchange-Traded Derivatives Contracts, Over-the-Counter Derivatives Contracts, and Spot Foreign Exchange Contracts for the Purposes of Leveraged Foreign Exchange Trading.

StoneX Financial GmbH (Company) a wholly owned subsidiary of StoneX Group Inc. The Company, entered in the Frankfurt am Main Commercial Register, HRB 101212 with seat in Frankfurt am Main, is authorized to perform payment service (Finanztransfergeschäft) in accordance to § 1 . PAR 1 sentence 2 No. 6 German Payment Act (ZAG) and regulated by the Federal Financial Supervisory Authority (Bundesanstalt für Finanzdienstleistungsaufsicht- BaFin) and the German Federal Bank (Deutsche Bundesbank- BuBa) under the register number BaFin-ID: 10141964.

StoneX Payment Services Ltd. is a wholly owned subsidiary of StoneX Group Inc. Incorporated in the State of Washington, U.S.A., Washington

Corporation (UBI 603 514 004). Authorized and regulated by Money Service Business Multi-State Protocol on NMLS [NMLS:1394445]

Licensing and Regulatory Information United States: StoneX Payment Services Ltd. (U.S.A.)

  • Washington Corporation (UBI 603 514 004)
  • FinCEN Registration as an MSB
  • Global Markets Entity Identifier (GMEI) (543008RP59ZQ3UQ1882)
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Additionally StoneX Payment Services Ltd. is licensed as a Money Transmitter in the following states:

Alabama (MT 811), Arizona (MT-1000854), California (MT 2653), Colorado (500262), District of Columbia (NMLS 1394445), Florida (FT230000253), Georgia (65171), Idaho (MTL-240), Illinois (MT 0000338), Iowa (2019-0003), Kansas (MT.0000148), Kentucky (SC700740), Louisiana (1394445), Maryland (NMLS 1394445), Michigan (MT0022015), Minnesota (NMLS 1394445), Missouri (MO-20-8525), Nebraska (NMLS 1394445), New Hampshire (22926-MT), New Jersey (1903874), New Mexico (NMLS 1394445), North Dakota (MT103229), Ohio (OHMT159), Oklahoma (NMLS 1394445), Oregon (30224), Pennsylvania (58690), South Carolina (NMLS 1394445), South Dakota (MT.2142), Tennessee (NMLS 1394445), Texas (3179), Utah (178), Washington (550-MT-116463), Wyoming (7253).

For a listing of state regulatory agency complaints departments and procedures, please consult our website at https://www.stonex.com/stonex-payment-services-ltd-sps-licenses. We encourage you to first contact SPS with any complaints so as to rectify your problem efficiently at complaints.stonexpaymentservices@stonex.com.

 

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