Although El Salvador recently passed a law Enforce Bitcoin as legal tenderAccording to reports, local remittance companies are hesitant to adopt BTC.
speak ReutersKenneth Suchoski, a fintech analyst at Autonomous Research, believes that remittance companies are unlikely to launch support for Bitcoin and other encrypted assets unless customer demand prompts it to do so, which may lead to a deadlock in the local payment industry.
“For Western Union and some other remittance providers, please remember that most of the transaction volume in the remittance industry flows from developed markets to emerging markets, mainly to people who operate in cash-family and friends -” he said .
Sukoski estimates that less than 1% of cross-border remittances worldwide are made using encrypted assets, adding:
“As far as Bitcoin is not adopted and not widely accepted, these remittance providers will still be relevant in the coming years.”
Global payment company MoneyGram International also highlighted the challenge of establishing an undeveloped infrastructure between crypto assets in emerging economies and local fiat currencies.
“We have built a bridge to connect Bitcoin and other digital currencies with local legal tender,” a MoneyGram representative told Reuters, adding:
“With the rise of cryptocurrencies and digital currencies, the core obstacle to further growth is the on/off of local fiat currencies.”
Last month, MoneyGram revealed its partnership with Coinme Enable users to buy and sell crypto assets U.S. dollars are used in 12,000 retail locations in the United States.
Sukoski also emphasized Compliance burden Supports payment companies’ crypto assets and points out that the annual compliance cost of Western Union has almost doubled in the past ten years or so, from approximately US$100 million to US$200 million.