Remittance companies established in El Salvador indicated that they do not intend to support cryptocurrency unless they receive demand from customers.
The information was disclosed by Reuters on June 14, 2021. The news agency consulted Kenneth Suchoski, Fintech analyst at Autonomous Research, who clarified that local companies will only begin to offer their customers the possibility of paying with bitcoin if they ask for it .
“For Western Union and some of the other remittance providers, please note that most of the volume in the remittance industry goes from developed markets to emerging markets, primarily destined for individuals – families and friends – who operate with cash, “said the analyst.
As long as bitcoin is not adopted and there is no widespread acceptance, these remittance providers will remain relevant for years to come.
Kenneth Suchoski, a fintech analyst at Autonomous Research.
According to the analyst, less than 1% of cross-border remittances worldwide are carried out with cryptocurrencies .
Therefore, companies would be forced to make an economic effort in order to adapt their systems to support bitcoin in order to offer the possibility of using the cryptocurrency to a very low number of customers .
It is worth remembering that there are already some companies in the Central American country that allow the sending of remittances with bitcoin. As CriptoNoticias reviewed on March 31, 2021, this type of transaction is possible from that date through the application for sending and receiving funds, Strike.
Increase share of cryptocurrencies in the remittance market
During an interview with the news agency, Suchoski also estimated that in the coming years cryptocurrencies will represent a larger portion of $ 500 billion annually in global remittances , an increase that has also been predicted by the World Bank.
All this, in a context in which the international organization foresees that the flow of remittances to Latin America will have a drop of 8% during the year 2021, due to the pandemic.
In that sense, the Chainalyisys geographic report revealed a few months ago that the need to send remittances has boosted the interest of Latin Americans in cryptocurrencies . All this mainly due to the population’s obstacles to access the traditional banking system and the inflation that affects several countries in the region.
For most analysts, the issue of remittances is key in Latin America, taking into account that they represent 1.7% of the region’s total GDP. By relating this fact to the transactions detected in the Bitcoin blockchain, the firm observed a concordance.
It should be noted that bitcoin, as the most popular cryptocurrency in the ecosystem, offers a fast and inexpensive way to send money across borders , without relying on the channels and intermediaries that participate in the traditional remittance system.