While El Salvador indulged in Bitcoin to help its abroad citizens send money back home, the largest remittance firms remain skeptical about offering crypto services.
On Wednesday, El Salvador became the first nation to accept BTC as a legal tender. Keep in mind that the move is after several institutions adopted crypto coins. With such movements, do you think that crypto is about to go mainstream?
Nayib Bukele, the nation’s president, declared BTC’s potential as a payment option for overseas Salvadorans.
However, despite the milestone by El Salvador, most traditional remittance firms involved in international money transfers are not experimenting. Efforts to join the crypto bandwagon can be risky, plummeting the fees that support their businesses.
US Autonomous Research fintech analyst Kenneth Suchoski stated that Western Union and other remittance services providers have most transactions moving from developed markets to emerging ones, primarily, friends and families that would use cash.
The analyst added that remittance providers would be relevant in the future if Bitcoin and other cryptocurrencies will achieve more mainstream.
Suchoski estimated the total volume of international cross-border remittances to be below 1%. However, crypto will likely have a larger share from the over $500 billion international annual remittances in years to come.
Keep in mind that theoretically, BTC offers a cheap and quick method for international money transfers without depending on old-style remittances.
MoneyGram remittance firm declared partnering with Coinme, a regulated crypto-cash broker, to allow its clients to sell and buy BTC.
Meanwhile, Suchoski said that Western Union had tried BTC dealings earlier but failed to get the cost savings results.
Most remittances firms, including Western Union, Ria Money Transfer, Xoom, Remitly, WorldRemit, and Wise failed to reply to requests for their comments.
The remittance space successfully evolved from physical retails to online some few years ago. The trend increased due to the pandemic. International remittances through mobile money surged to $12 billion in 2020, a 65% increase. However, transitioning to crypto from digital can be more challenging.
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