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Reportedly, 25% of El Salvador’s GDP comes from money being wired in to the Central American Nation from overseas. Remittances are set to reap a larger share of the country’s new Bitcoin experiment.
Denelle Dixon, CEO of Stellar Development Foundation, tells Karen Webster that the door has been flung open for crypto competition including stablecoins.
Denelle Dixon’s perspective: It is a fun topic, President Bukele has done this. It is really going to transform the focus and attention on Bitcoin.
Why do you say that? Any country that decides it is going to be a legal tender sort of changes the idea of Bitcoin from just being something that is out there which only a certain segment of our population focuses on to something that others need to pay attention to. I think it is a really great move in terms of just the blockchain space generally.
They are going to see Challenges in El Salvador and elsewhere when other countries do this as well. But they are going to get opportunity as well to create education to amass a lot of knowledge around blockchain and to be able to leverage the strength of it. And, to recognize the weakness as well.
What are you going to be looking for? This is really the first real-time live experiment? Bitcoin as a payment method or legal tender in a country. What were you looking for?
I think the really important thing is this law has put attention to the fact that the things that we all ignore, the cost of remittance and the way that remittance actually takes place really is fragmented. And, I think because of that what I want to see is how remittance can change as a result of laws like this. So, not just focusing on Bitcoin, but also focusing on some stable coin.
Stable coins seem to be a lot easier in terms of payments. If you think about just El Salvador in specific, the diaspora has transferred 6 billion of remittances last year along in El Salvador. It is 25% of the GDP which is huge for them. And, so getting this right is important.
So, I want to see education. I want to see a lot of focus on the idea that Bitcoin is volatile. Not everyone needs to understand that when they get to it. But, education around how to do this and how also to leverage other blockchains and frankly stable coins, it is going to be really a hard part of it.
