Last week, the El Salvadoran Congress passed a bill to recognized Bitcoin as legal tender. However, despite the move by the government to embrace Bitcoin local remittance firms appear hesitant to accept Bitcoin.
While speaking to Reuters, Kenneth Suchoski, a fintech analyst at the leading independent research firm Autonomous Research, opined that remittance firms were less likely to roll out support for Bitcoin and other cryptos unless there is a demand from customers. He explained:
For Western Union and some of the other remittance providers, keep in mind that most of the volume in the remittance industry is going from developed markets to emerging markets primarily to people — families and friends — that operate in cash.
He goes further to note that less than 1% of global cross-border remittances make use of cryptocurrencies. As a result, traditional remittance services will continue to dominate the market and stay relevant for years to come.
Meanwhile, MoneyGram International has also voiced the challenges of switching between undeveloped infrastructure enabling ramps between cryptocurrencies and local fiat currencies in developing economies. A representative of the global payments firm told Reuters that:
We've built a bridge to connect bitcoin and other digital currencies to local fiat currency. As crypto and digital currencies rise in prominence, a core barrier to further growth is the on/off ramps to local fiat currencies.