El Salvador's bitcoin adoption could totally revolutionize the country's remittance payment rails.
. So the funneling of cash from abroad back home to El Salvador is critical to survival for most of the country.
If he uses his Muun self-custodial wallet for the transaction, however, he will pay 10 cents, or a 1% fee. And if García were to pay from a Chivo wallet, which is reserved for Salvadoran nationals living at home or abroad, the transaction would be free. Once his cousin receives the funds, he can then go to any of the 200 new Chivo ATMs the government has rolled out and withdraw U.S. dollars from his virtual wallet.
García hadn't thought twice about cryptocurrencies before the June announcement. "But my birth country decided to get into bitcoin, so I wanted to learn all about how it works," said García. "It will be interesting to see the impact on remittances in a few months and see what percentage of it uses the bitcoin network rails," said Lozada. "My guess is most people initially will cash bitcoin into U.S. dollars, as this is what they are used to, but we should see a gradual adoption of bitcoin as the main means of transaction and pricing. I see a future where consumer items like milk and bread are priced in bitcoin directly and people might even start holding bitcoin.
Gladstein, who recently spent time in El Salvador, points out that the Chivo wallet is no different than a bank, meaning that the government has the authority to freeze the value. That is why he is a firm believer in Salvadorans taking control of their financial destinies by transferring their bitcoin out of Chivo and into a wallet where they can exercise more control over the funds.