Many people in El Salvador depend on remittances sent by relatives living abroad. About 20 percent of the country's GDP comes from remittances. About 2 million people in El Salvador live abroad. But they have a very close relationship with the motherland, they send about four billion US dollars a year to the country. But is Bitcoin or cryptocurrency the easiest and best way to send remittances? When a person sends remittances to his home country from abroad, they usually use a bank or financial institution for this transaction. But there is a cost to sending money through such an organization. They have to pay a commission to send money from one country to another. For example, if someone wants to send a thousand dollars from the United States and if there is an opportunity to send money on zero commission, then in reality customers have to pay a lot of fees. Banks in both countries charge this fee.
A comparative advantage of Bitcoin or any other cryptocurrency is that there are no intermediaries in their transactions. So Bitcoin is a very attractive currency for sending remittances to people in poor countries. Although bitcoin or other such cryptocurrencies remain a serious risk.
"Since the currencies of low-income countries are very weak, they have suffered a lot. When there is a big change in the market and inflation is very high, they are in a very fragile position." If Bitcoin is more established and widely used then maybe this currency will become quite stable.", Nigel green a tech CEO.
The established banking system has a number of measures in place to protect a customer from currency-currency variations. But in the case of Bitcoin, there is no such thing as consumer protection. But BTC is volatile and rates are fluctuating. Till now mostly regarded as an investment than currency to most.
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