A new competitor on Stablecoin remittances appears to be coming to El Salvador. It is MoneyGram, which has partnered with Stellar’s blockchain to use USD Coin (USDC) to transfer money to emerging countries.
Summary
El Salvador in MoneyGram’s crosshairs for stablecoin remittances
USDC will be the stablecoin used to finalize remittances
In an interview with Bloomberg, MoneyGram CEO Alex Holmes made comments regarding its new stablecoin remittance service for emerging countries, which will also have competitive rates against El Salvador, a country where Bitcoin is legal.
In fact, MoneyGram is preparing to launch this new service in partnership with Stellar Blockchain that will allow users to send USD Coin (USDC), Circle Internet Financial’s virtual currency pegged to the dollar.
In this way, MoneyGram’s new service with Stellar could also help spread the use of cryptocurrency in emerging markets.
Remittances to low- and middle-income countries grew to $589 billion last year and are expected to increase this year, according to the World Bank. In El Salvador, remittances account for more than 20% of gross domestic product.
Holmes said that fees for sending money to El Salvador from the US via MoneyGram range from 0.5 to 2.5% of the face value of a transaction, below the World Bank’s target of 3%. The costs of acquiring and transferring Bitcoin through deposit wallets or exchanges and converting it back into dollars by the recipient can exceed those of traditional remittance networks.
El Salvador and MoneyGram remittances: growing confidence in cryptocurrencies
Continuing with the interview, Holmes was very confident about cryptocurrencies, specifically stablecoins, despite the collapse of TerraUSD putting doubts in the market.
Here are his words:
“The world of crypto and the world of fiat are not really compatible today,” MoneyGram Chief Executive Officer Alex Holmes said in an interview with Bloomberg News. “We’re trying to be a bridge from the crypto world to the fiat world”.
In the specific case of El Salvador, Holmes added:
“If a country like El Salvador is going to make Bitcoin seamless with US dollars in country, I think that consumers, through MoneyGram, should be able to transfer Bitcoin to El Salvador or transfer dollars and convert them to Bitcoin. If that’s where the world is going, let’s participate in that world and let’s see how we can help fulfill that opportunity”.
Nayib Bukele’s meeting with 44 countries to talk about Bitcoin
In the middle of last month, the President of El Salvador, Nayib Bukele welcomed as many as 32 central banks and 12 authorities from 44 countries to the country to talk about Bitcoin.
Centre stage were discussions to understand the benefits of having Bitcoin as legal tender, which interested all of these nations.
Also at the same time, Bukele had also announced his purchase of 500 BTC at a price of $30,744 each, executing the famous “buy the dip”.
At the time of writing, BTC has surpassed the $30.00 mark, settling at $31,500 after a good two weeks of price fluctuation below 30k.
