Bitcoin crushes the competition? – The advent of Bitcoin (BTC) as legal tender in El Salvador on September 7, 2021 will undoubtedly change the economic landscape of El Salvador, including for its expatriates. Because if Western Union and MoneyGram have so far dominated the sending of foreign currency from Salvadorans living abroad to their country of origin, the king of cryptos will clearly overturn the table.
$ 6 billion in in-game fund transfers
If the internal changes Salvador are the most visible, with large chains, such as McDonald’s and Starbucks are starting to accept Bitcoin, this crypto-revolution also has a direct impact outside from the country of Central America.
Indeed, as reported by the CNBC media, for the only year 2020, El Salvador received nearly $ 6 billion via fund transfers from its nationals abroad, mainly located in the United States and Canada.
One of these Salvadoran expats, interviewed by CNBC, explains how much he was annoying for him to pay a fortune in fees to Western Union, whenever he wanted to send money to his family who stayed behind.
“In our time, it is incredible that I have to surrender [physiquement] at a Western Union office, give them cash, then give them another $ 25 [en frais] before they send my money (…) And then, of course, it takes 3 days for the money to arrive in El Salvador. “
Jaime García, Salvadorian expatriate
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Bitcoin set to change everything?
The Goat wallet, made available to its population by the Salvadoran government, allows free BTC transactions, thanks to Lightning Network, and of course also offers almost instant cross-border payments.
“Wherever you are now, you can send bitcoin to anyone who has a Chivo wallet in El Salvador and in an instant they have the funds, and can even then go to an ATM and withdraw them in cash at no cost (… ) It’s mind-blowing. It is an incredible humanitarian improvement. “
Alex Gladstein, Director of Strategy at the Human Rights Foundation
The only ones who will not be happy with this change will be the intermediaries Wester Union and MoneyGram. Salvadoran President Here’s to watching believes that these money service providers will lose $ 400 million per year on their remittance commissions.
“It won’t happen overnight. 100% of fund transfers will not go to the Chivo app tomorrow. These things take time, and people naturally worry about trying new things with their money. But the current fee levels for fund transfers [traditionnels] will not be able to withstand the competition [de Bitcoin]. »
Matt Hougan, Chief Investment Officer at Bitwise Asset Management
Salvadorians abroad and their families still in the country will be able to make significant savings, which will trickle down then in the real economy of El Salvador. Waiting for, the country is already building a veritable little bitcoin war chest, since President Nayib Bukele announced that 150 more BTC had been added to the nation’s accounts, taking advantage of the low point of the panic sell from this Tuesday, September 7.
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