INSUBCONTINENT EXCLUSIVE:
Mr Bukele has touted bitcoin adoption for facilitating remittance payments from Salvadorans living abroadCentral American countries are
eagerly waiting to see if El Salvador's adoption of bitcoin as parallel legal tender cuts the cost of remittances, an important source of
income for millions of people, the region's development bank said
President Nayib Bukele's congressional allies have already approved legislation giving the cryptocurrency official currency status
alongside the U.S dollar, a first in the world
The move takes effect in September.Mr Bukele has touted bitcoin adoption as a way to facilitate remittance payments from Salvadorans living
abroad."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," Mr Dante Mossi, the executive president of the Central American Bank for Economic
Integration (CABEI), told Reuters.Mr Mossi called the plan an "out of this world experiment" geared 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
CABEI, the regional development bank, is giving El Salvador technical assistance on implementing the cryptocurrency, an important show of
support as the World Bank declined to help, citing environmental and transparency drawbacks.Mr Mossi said the Central American nations that
receive the most remittances are those most likely to favor using bitcoin and underscored that CABEI had a "fiduciary obligation" to support
El Salvador in its request for help."Guatemala, Honduras and El Salvador are the countries that would have the most to gain if the adoption
of bitcoin lowered the cost of sending remittances," said Mr Mossi.CABEI 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
The Central Bank of Honduras referred Reuters to a June 11 statement which said the bank does not prohibit, supervise or guarantee the use
of cryptocurrencies as methods of payment in the country
The governments of Guatemala and Honduras did not immediately respond to a request for comment.Under 1 per cent of the volume of global
crossborder remittances are currently in crypto, according to Autonomous Research, but in the future crypto is expected to account for a
larger slice of the more than $500 billion in for annual global remittances
Bitcoin offers, in theory, a quick and cheap way to send money across borders without relying on traditional channels.CABEI's head of
investments Carlos Sanchez said the bank's 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 Mr Sanchez.
