Despite the savings in commissions that it may entail, a good part of Salvadorans living in Spain are reluctant to replace traditional money transfers to their country with bitcoin, the new legal virtual currency in El Salvador, as they distrust its operation and the ups and downs of the price.
“I would not use bitcoin neither in El Salvador nor in Spain; I don’t want my country to be the world’s laboratory rat, ”Ana María, who has lived in Madrid for more than seven years, told EFE.
“Before sending money home, I ask how the change (euro / dollar) is, but with bitcoin I can’t know for sure,” he argues. This 37-year-old Salvadoran sends a monthly amount to Morazán, where she was born.
On September 7, El Salvador became the first country in the world where bitcoin is the legal currency of payment, along with the US dollar, according to the legislation approved last June.
For now, and despite the fact that each citizen receives $ 30 free (charged to the State) for opening an account, few trust to use Chivo, the virtual wallet that the Government has created to make transactions or receive payments both in bitcoins and in Dollars.
Commission savings
Among other arguments in favor of digital currency, the President of the Republic, Nayib Bukele, said in August that Salvadorans residing abroad pay 400 million dollars a year in commissions for the remittances they send and that "only that saving will be a huge benefit".
Almost one in four Salvadorans works abroad, according to the UN (1.6 of its nearly 6.5 million inhabitants).
The Salvadoran diaspora sent more than 25,000 million dollars in 2020, which represents 22% of the Gross Domestic Product of El Salvador, according to the World Bank, making it one of the ten countries that most depend on the money of its emigrants.
Therefore, the entry of the country into the new world of virtual remittances free of commissions could generate great collective savings, since more than 3% of the amounts transferred from abroad are commissions from intermediaries.
A month later, the expectation grows to see if it will mean the "monetary revolution" definitive for sending money and other Latin American nations such as Uruguay, Guatemala or Honduras have shown interest in following in the footsteps of El Salvador.
Confusion and mistrust
But the alleged advantages do not convince a majority of Salvadorans consulted by EFE in Spain.
“I do not trust bitcoin,” concludes Ana María, who prefers to continue trusting Ria, Moneygram or Western Union, the large companies that lead the sending of remittances, and that charge between 4 and 5.5 euros per operation (4.5-6.5 dollars ).
The great volatility of this cryptocurrency causes fluctuations much sharper than the exchange rate between the dollar – a currency that El Salvador adopted as its own in 2001 – and the euro, since the value of bitcoin has recently fallen by 20% in a single day.
“Of the 30 dollars that they gave me when I opened my account in Chivo, I reached 27, and the next day 31,” a Salvadoran who lives in a town in the region of Catalonia (northeast), where he has worked for a long time, tells EFE. three years.
“I send money home every month, and I can’t send 500 euros for my mother to buy an oven, medicine, or fix the roof of her house, and she receives 350. I can’t trust it,” he warns, alluding to the sudden ups and downs of quotation.
Another Salvadoran who has been in Spain for more than nine years, Nelson, harshly criticizes the Salvadoran government for a decision that he considers too hasty. "There is too much financial illiteracy in my country for them to understand what bitcoin is ”, he adds.
“And why haven’t rich countries embraced bitcoin?"Nelson wonders. “In addition, now there is a lot of offer (to send remittances) and low commissions,” he adds.
However, not everyone is reticent. Maira, who has been in Madrid since 2012, says that her entire family already uses Chivo. “I would not use it to save,” he says, “but to sell my bitcoins when they are high,” in addition to sending money.
“I am always in favor of technology, my son taught me what cryptocurrencies are, and my mother, who lives in San Salvador, has bought medicines with the $ 30 she earned,” he argues.
Master move or failure, time will judge. At the moment, many Salvadorans in Spain are suspicious of the “Bitcoin Revolution”, the battle against the traditional monetary system proposed by President Bukele, which could irreversibly shake the sending of cash from one country to another.
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