Central American countries are eagerly waiting to see if El Salvador’s adoption of Bitcoin as an optional legal tender cuts the cost of remittances, an important source of income for millions of people, say the region’s development bank. The executive president of the Central American Bank for Economic Integration said, “Everyone is watching if it goes well for El Salvador and if, for example, the cost of remittances drops substantially, other countries will probably seek that advantage and adopt it.”
Bukele has touted the adoption of Bitcoin as a way to facilitate remittance payments.
El Salvador President Bukele has touted the adoption of Bitcoin as a way to facilitate remittance payments from Salvadorans living abroad. CABEI executive called the plan an “out-of-this-world experiment” aimed at increasing financial inclusion in a region where many people lack access to bank accounts or credit cards and rely on money sent home from relatives living in the United States. CABEI, the regional development bank, is giving El Salvador technical assistance on implementing the cryptocurrency, while global regulators like the World Bank have refused to do so.
CABEI is helping El Salvador design a legal framework for the adoption of Bitcoin.
CABEI technical assistance is focused on helping El Salvador design a legal framework for the adoption of Bitcoin and to make sure strict international money laundering protocols are adhered to. The assistance is meant to help El Salvador “navigate waters that have yet to be explored,” said CABEI’s head of investments, Carlos Sanchez. CABEI also participated in a recent meeting of the Central American Monetary Council, part of the Central American Integration System (SICA), where participants asked about El Salvador’s Bitcoin plans and showed interest, he added.