Este Salvador is now on the third day with bitcoin being legal tender in the nation. There have so far been numerous testimonies of how the law has worked so far. With occupants posting evidence of the ease of spending bitcoin in the country since the implementation. Stores have also implemented bitcoin payments in the country. With the loves of McDonald’s and Starbucks now accepting bitcoin payments in El Salvador.
One aspect that is however to be addressed is the way the implementation will affect existing remittance services in the country. Remittances were a big point for your argument of bitcoin ownership in the country. It was explained that sending money from overseas to El Salvador has been cheaper with bitcoin. Yet again it functions as a lawful tender in the country, it is important to take a look at how this will affect current companies like Western Partnership and MoneyGram.
Bitcoin Is A Better Way To Remit
Smaller sized countries like El Salvador owe a significant percentage of the economy to remittances. Approximately in 2020 alone, remittances from citizens overseas accounted for 23% of the gross domestic product of the country. Which makes it a major economic contributor in the land. Remittances alone in 2020 came out to $6 billion, of which the remittance services which are used to send these types of monies take a percentage since fees.
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With bitcoin though, the middleman, in this case, Western Union and the likes, are totally removed from the process. The money sent go directly to the recipient without the need for a digesting fee to a third party. It is estimated that these remittance companies are started lose about $400 mil a year when remittances are routed through bitcoin rather.
It cannot be underestimated how important remittances are to the nation-state of El Salvador, which is why the remittance industry is booming in the united states. With an approximate 70% from the population receiving remittance payments from overseas, bitcoin obligations will save citizens millions of dollars within commissions being paid to third-party remittance services.
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Using Crypto Within El Salvador
The first day of the official execution of bitcoin as legal tender in the country was dubbed “Bitcoin Day” by Leader Nayib Bukele. In commiseration of the historic event, the nation of El Salvador experienced bought an additional 150 bitcoins, bringing its total bitcoin holdings to 550 coins.
One Tweets user known as Bart Mol took to the platform to show exactly how “Bitcoin Day” was going. Mol posted updates with pictures and videos to exhibit how the implementation had been received by the citizens. The majority of the residents seem to be quite all right with it. But there were small protests around the country against the implementation.
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Other troubles included the government-issued crypto wallet Chivo not working correctly. And the bitcoin ATM machines had run out of coins, which made it impossible for individuals to spend their bitcoins. Yet payments being made in the Lightning Network had the best success. Mol posted which he had been able to pay for the pizza at Pizza Hut for a tiny fee.
Notwithstanding the problems encountered on the first day, the planet still looks on excitedly towards El Salvador. The usage of crypto as an official legal tender is a momentous event. And as Mol put it, “This is the future. ”
Bitcoin looks started take over remittances in Este Salvador. How long do you think it will take for it to become a global arrange currency? Let us know your thoughts here.
With #Bitcoin becoming legal sensitive in #ElSalvador, how long till it becomes the global reserve foreign currency? @nayibbukele
— Bitcoinist. com (@bitcoinist) Sept 7, 2021