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> I think awful is how the banks of the developed world are earning money with the poorest. The fees for remitance make up for a large portion of the el salvado

> I think awful is how the banks of the developed world are earning money with the poorest. The fees for remitance make up for a large portion of the el salvadors GDP. The fees are high because the costs are high. Existing remittance channels are shackled by anti-money-laundering, anti-organized-crime, anti-terrorism, know-your-customer compliance costs (typically enforced by the governments of multiple jurisdictions leaning on the money transfer operator's banking partners, who tend to be skittish about these things as a result). The world average of a ~$14 fee on a $200 remittance is easily in line with these costs; any crypto-remittance system which offers lower fees is only able to do so because it bypasses these controls. If you wanted to reform this in the existing world banking system, you'd need the US and El Salvador government to work with each other to some treaty which streamlines these channels; this would lower costs either directly or when competition arose.

exdsq 5y ago
And all the other fees taken along the way too https://www.moneyandbanking.com/commentary/2018/2/18/the-stubbornly-high-cost-of-remittances https://www.moneyandbanking.com/commentary/2018/2/18/the-stu...
tehjoker 5y ago
El Salvador was the site of Ronald Regan's financing of death squads in the 1980s. The cost of preventing these crimes and terrorism pales in comparison to the official terrorism that was perpetrated on that country. I'm not sure if there's a direct tie to Iran-Contra, but in Nicaragua Regan directly contravened a congressional funding ban and used Iranian and CIA drug money to fund the death squads there. Similar funding sources were probably at play in El Salvador.
el-salvador 5y ago
> If you wanted to reform this in the existing world banking system, you'd need the US and El Salvador government to work with each other to some treaty which streamlines these channels; this would lower costs either directly or when competition arose Major banks in El Salvador accept cheques from US banks, sometimes of them without any fees or very low fees. Main disadvantage is that it is slow. I haven't seen this used as a mainstream remmitance channel though. But an Salvadoran American relative could give their family a checkbook and they could deposit it here. This is for cheques though. Different from Panama and Mexico whose ACH systems are connected with the US Fed ACH system in a way El Salvador isn't.
topranks 5y ago
The fees are inflated because the block size is artificially limited. The mining reward is likely still enough to incentivize miners without any significant fee market, and difficulty adjustment is part of the protocol anyway.

exdsq 5y ago

And all the other fees taken along the way too https://www.moneyandbanking.com/commentary/2018/2/18/the-stubbornly-high-cost-of-remittances https://www.moneyandbanking.com/commentary/2018/2/18/the-stu...

tehjoker 5y ago

El Salvador was the site of Ronald Regan's financing of death squads in the 1980s. The cost of preventing these crimes and terrorism pales in comparison to the official terrorism that was perpetrated on that country. I'm not sure if there's a direct tie to Iran-Contra, but in Nicaragua Regan directly contravened a congressional funding ban and used Iranian and CIA drug money to fund the death squads there. Similar funding sources were probably at play in El Salvador.

el-salvador 5y ago

> If you wanted to reform this in the existing world banking system, you'd need the US and El Salvador government to work with each other to some treaty which streamlines these channels; this would lower costs either directly or when competition arose Major banks in El Salvador accept cheques from US banks, sometimes of them without any fees or very low fees. Main disadvantage is that it is slow. I haven't seen this used as a mainstream remmitance channel though. But an Salvadoran American relative could give their family a checkbook and they could deposit it here. This is for cheques though. Different from Panama and Mexico whose ACH systems are connected with the US Fed ACH system in a way El Salvador isn't.

topranks 5y ago

The fees are inflated because the block size is artificially limited. The mining reward is likely still enough to incentivize miners without any significant fee market, and difficulty adjustment is part of the protocol anyway.