El Salvador’s Bitcoin ($BTC) Adoption Could Cost Western Union Millions, Here’s Why

By Prashant Jha
September 9, 2021 Updated September 9, 2021
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El Salavador

El Salvador created history in June after the country’s congress passed the Bitcoin Bill making it a legal tender in the country. The country celebrated Bitcoin Day on September 7 as BTC was officially integrated into the country’s monetary system. President Bukele said that the decision to shift to Bitcoin was done to offer banking services to over 70% of un-banked Salvadorians.

The Chivo wallet has been announced as the national Bitcoin wallet service provider along with the installation of 200 Bitcoin ATMs. The President also airdropped $30 worth of BTC for every adult in the country to promote BTC’s use. Bitcoin’s rise as a legal tender in the country can bring doom to the traditional money transfer businesses especially the likes of Western Union.

El Salvador uses cross-border remittance services such as Western Union and Moneygram at a large scale, which leads to high remittance charges. Last year alone, the people in the small central American nation collectively transacted $6 billion in remittance. President Bukele estimated that if the citizens start using Bitcoin at large, it could cost money transfer services $400 million every year.

The popularity of Bitcoin is evident from the number of wallet downloads in the country. The top-6 finance app in the country is all Bitcoin or crypto-related applications.

McDonald’s And Starbucks in El Salvador Accepts Bitcoin

After becoming a legal tender in the country, various world-renowned restaurants, and retail giants such as McDonald’s, Starbucks, and Walmart have started accepting Bitcoin payments. The country’s BTC adoption which only a year ago might seem like a joke has triggered a domino effect on other small nations looking for financial breakthroughs.

Ukraine joined the growing list of countries that have legalized Bitcoin use for financial transactions while Panama has introduced a bill for legalizing the use of Bitcoin and Ethereum in the country. El Salvador could become a case study and offer a blueprint for other nations looking to adopt Bitcoin. Remittance is one of the biggest sectors that cryptocurrencies can bring a massive change to, as it could lead to lesser transaction costs and instant transfers.

An engineering graduate, Prashant focuses on UK and Indian markets. As a crypto-journalist, his interests lie in blockchain technology adoption across emerging economies.
The presented content may include the personal opinion of the author and is subject to market condition. Do your market research before investing in cryptocurrencies. The author or the publication does not hold any responsibility for your personal financial loss.

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