The introduction of Bitcoin as an approved form of payment in El Salvador did not sit well with many money transfer companies.
Last Wednesday, the country became the first to recognize Bitcoin as a legal tender. The President of El Salvador recognized the digital currency’s genuine value, but the services that conduct most cross-border currency transactions are still resistant to change.
Currently, the equivalent of digital money accounts for less than 1% of total worldwide cross-border cash transfers. At the same time, analysts predict that digital money will account for more than 500 billion dollars in remittances in the future. Bitcoin is still one of the fastest and cheapest ways to transport money across borders if you don’t use regular transfer methods, despite some “non-recognition.”
MoneyGram, one of the major money transfer companies, previously stated that, in collaboration with Coinme, customers would be able to purchase and sell bitcoin for cash at 12,000 sites across the United States. According to firm spokespeople, they have developed a bridge between fiat and cryptocurrencies. Still, the greatest barrier to the latter’s further growth is precisely “turning it on” and “turning it off.”
Western Union also mentioned that it has previously experimented with Bitcoin and other cryptocurrencies in money transfers. Still, it had not discovered an effective “use case” that would save clients money.
According to Reuters, cross-border transaction costs have averaged 6.5 percent, which is more than double the United Nations’ 2030 aim for sustainable economic development.
Institutions do not share the President of El Salvador’s optimism, doubting good developments for the country’s economy in the wake of the adoption of Bitcoin as a payment method.