El Salvador has made headlines for becoming the first country to accept Bitcoin as legal tender. It is also moving towards becoming a Bitcoin mining hub by leveraging its renewable energy potential. However, this doesn’t seem to have spurred excitement amongst remittance services providers.
According to Kenneth Suchoski, a financial analyst, remittance companies are unlikely to offer services in BTC anytime soon.
Suchoski added that the adoption of such service would be led purely by the forces of demand and supply. He added that the reason most remittances are done through companies like Western Union is the convenience aspect of it.
Most remittances come from the developed world to the developing world, where people primarily use cash. He noted that since most people rely on cash remittances, it could be a barrier to adopting crypto-based remittances.
To bring forth the picture in crypto at the moment, Suchoski noted that as things stand, only one percent of global money transfers is done in cryptocurrency.
Suchoski also touched on the issue of legal compliance. He specifically noted that the compliance costs of companies like Western Union had doubled in the last 10-years.
MoneyGram International echoed his sentiments. MoneyGram has stated that there is a serious infrastructure challenge for on-ramping crypto and local fiat in the developing world.
However, the company has stated that it had taken tremendous steps towards creating the infrastructure. A while back, MoneyGram announced that it was partnering with Coinme to help users buy and sell crypto all over the U.S.