Remittance firms hesitant to support BTC despite legal tender law in El Salvador

The country of El Salvador has recently passed a law that makes Bitcoin and other cryptocurrencies legal tender. The government has yet to give details about what that means for the country, but there are many who think that it will actually lead to a slowdown in the growth of cryptocurrency in the country.

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The Central Bank of El Salvador recently approved a bill that legalizes the use of Bitcoin and other cryptocurrencies. This bill was to have taken effect on January 1st of 2017 but was delayed until after the legislative elections in November. Since the bill’s approval, there has been a large influx of Bitcoin startups to El Salvador, many of them offering ways to transfer money overseas using Bitcoin. However, the majority of remittance services in the country have been reluctant to accept Bitcoin.

After a January 1 decision by Juan Carlos Bonilla, the country’s Central Bank Governor, to make bitcoin legal tender, the cryptocurrency has been used more on the black market than on the official exchanges. Bitcoin Remittance in El Salvador – BitQuick Blog. Read more about why is cryptocurrency valuable and let us know what you think.

Despite a recent law in El Salvador making bitcoin a legal form of payment, local money transfer companies are reportedly reluctant to accept BTC. Speaking to Reuters, Kenneth Suhoski, analyst at fintech firm Autonomous Research, said that money transfer companies are unlikely to introduce support for bitcoin and other crypto assets until customer demand forces them to do so, likely leading to a standoff for the local payments industry. Western Union and other providers of remittance services should keep in mind that most of the volume of remittances from developed countries goes to emerging markets, primarily to people – families and friends – who use cash, he said. Suchoski estimates that less than 1% of global cross-border remittances are done with crypto assets, adding: To the extent that bitcoin does not become mainstream, these money transfer service providers will remain relevant for years to come. International payments company MoneyGram International also pointed to the challenge of underdeveloped infrastructure to convert cryptocurrencies into local fiat currencies in emerging markets. We have built a bridge to connect bitcoin and other digital currencies with local fiat currencies, a MoneyGram spokesperson told Reuters, adding: Although cryptocurrencies and digital currencies are becoming increasingly popular, the main barrier to further growth is the shift to local fiat currencies. Last month, MoneyGram announced a partnership with Coinme that will allow users to buy and sell cryptoassets with U.S. dollars at 12,000 retail locations across the United States. Related: El Salvador’s move to bitcoin could jeopardize IMF negotiations JPMorgan Suchoski also pointed out that supporting crypto assets requires compliance from payment companies, noting that Western Union’s annual compliance costs have nearly doubled over the past decade, from about $100 million to $200 million.A common strategy among remittance firms is to stop paying in Bitcoin (BTC) once the government requires them to. This happens because once they are required to pay in national currency (sending money to a bank) then they can no longer pay in Bitcoin (BTC). This law in El Salvador is actually a new amendment to the already existing legal tender law, but the effects of this new law have yet to be seen.. Read more about who runs bitcoin and let us know what you think.

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