Oscar Chacon says: ‘Bitcoin is a challenge for Salvadorans in the US’
The immigrant rights advocate gave a presentation on bitcoin and remittances at the 16th week for immigrants organized by the University of Technology.
Sending remittances from abroad has always been expensive. Whoever sends them pays a commission for shipping. Bitcoin has been promoted as a currency in El Salvador as a way to avoid paying these commissions. However, Oscar Chacon, director of Alianza Américas, sees sending remittances using cryptocurrency as a challenge for Salvadorans in the United States.
On August 30, Chacón gave the presentation “Using Bitcoin to Send Remittances.”
Within the framework of the sixteenth immigrant week organized by the University of Technology. There he explained that although sending remittances through the traditional financial system presents costs for users, digital currencies have other drawbacks such as volatility and the commission that must be paid to transfer assets from one wallet to another.
Chacon believes that in the current financial system, the consumer, in general, ends up paying “extremely high costs, not only to send remittances, but in general, to obtain banking services.” However, these costs are not absent when using cryptocurrencies to send cryptocurrencies.
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When sending remittances via a bank or remittance service, users pay between 5 and 7% of the amount sent for “administrative costs,” according to Shakun. “In some cases, for emergency reasons or for lack of knowledge, people pay much more than that percentage,” he added.
He noted that the most recent data indicates that between 36% and 37% of Salvadorans have a bank account; A percentage “very far from 57%, which is the average rate for banks in Latin America”. Bitcoin has also been promoted in El Salvador as a way to integrate more people into the banking system. However, Chuck considers that it is Salvadorans naturalized in the United States, permanent residents and those with a work permit that more than Guatemalans and Hondurans enjoy some of these types of protection. In his opinion, this “confirms that Salvadorans are on the right track” in using banking services in the United States. “For Salvadorans, it would be difficult to associate, in theory, a cryptocurrency with bitcoin,” he warned. “Especially when it is known that a cryptocurrency like Bitcoin suffers from a high degree of exchange rate volatility, that is, the changes are abrupt,” Chacon recalls, referring to the declines that the crypto asset has experienced in recent weeks.
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The migrant rights activist pointed out that remittances not only help the economy of thousands of Salvadoran families, but also help them pay taxes, because they pay value-added tax every time they buy. When Alianza Américas investigated the case in 2009, it found that the Salvadoran state received about $200 million annually related to the use of remittances, “and the volume of remittances at that time was much lower than it is today.”
In Chacon’s opinion, without remittances, El Salvador would look different than it does now. “And I must also say this: Remittances have fueled bad habits, and I’m not talking about how people spend remittances, I’m mainly talking about bad habits in circles. Political and economic decision-making.” He considers that every Salvadoran who goes to the United States has represented, for these and other governments, one less critic and another source of remittances, which is why politicians have not bothered to solve the causes of emigration.
But in addition to being a source of bad habits, remittances have a positive impact: “One of the most important effects of remittances is to enable access to basic social services, which are essential to the well-being of any society, including access to education.”
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After completing his presentation, Chequn received a question: “Do you think Salvadorans in the United States will use bitcoin to send remittances?” “The logical answer is no,” he said, then added, “I want my parents to get what I send them. If they tell me that if I send $150, what they will give will be according to the current exchange rate of bitcoin on the day of delivery, and what if it drops 50% ? From my point of view, I don’t want any transfers to suffer any kind of fluctuation between the moment they are sent and the moment their parents receive.”