Moneygram and Western Union could lose up to $400 million if crypto wallets in El Salvador would start gaining traction. The Republic of El Salvador has been highlighted a lot as the country is adopting bitcoin as a legal tender. This would make it the first-known nation-state to actually purchase the leading crypto asset.
Crypto Wallet: Chivo Wallet
According to News.Bitcoin.com, a recent report details that certain remittance providers, just like Moneygram and Western Union could lose up to a whopping $400 million per year if the upcoming crypto wallet, Chivo wallet, is more used. Furthermore, Tim Berners-Lee, the creator of the world wide web, gives his opinion regarding why Nayib Bukele, Salvadoran president, announced the bitcoin tender law at the said Miami bitcoin conference.
Ever since El Salvador officially adopted Bitcoin or $BTC as a legal currency on September 7, 2021, the country has been a centerpiece of discussion. Bitcoin.com News reports that many developments in El Salvador are coming from the Bitcoin Beach to the 30for30 trend that just took place recently.
El Salvador on Bitcoin
The country also reportedly started buying massive quantities of Bitcoin or $BTC before the whole legalization was implemented. The exact next day during the supposed Bitcoin $BTC market rout, Nayib Bukele noted that El Salvador "bought the dip." Just recently, 250,000 Ethereum coins were burned. Learn more about how Ethereum burns its coins.
Bitcoin.com News also reported on the government Bitcoin wallet known as Chivo and how the wallet reportedly had a number of launch issues that took place during its launch day. The following day, however, the ability to download the Chivo wallet was then easier and the president said that the wallet's maintenance was finally complete.
Remittance in El Salvador
A recent report that was published by CNBC explains that if the reported Chivo wallet would happen to gather mass adaptation and remove remittance customers from the usual financial institutions, they could actually lose millions. MacKenzie Sigalos of CNBC reports that should the massive population adapt to Bitcoin "at scale", there could be a chance for both Western Union and MoneyGram to lose a whopping $400 per year in commissions it gets from remittances.
In El Salvador, it was noted that remittances actually make up a whopping 50% of a citizen's total income, and they reportedly make up close to a quarter of the country's reported GDP. Sigalos reportedly highlights that about 70% of the El Salvador population receives remittances. The SEC is still trying to pursue Ripple while allegedly threatening Coinbase as well.
Sigalos reportedly reached out to Western Union, asking if they were worried about the possible transition. Berners-Lee reportedly notes that it's not clear if forcing merchants to start adopting Bitcoin will actually help the people who are still lacking banking services. It was noted that Bitcoin still requires the use of the Internet, which remains spotty in certain parts of El Salvador.
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Written by Urian B.