5 ms·

Apparently, a fairly high percentage of El Salvador's economy is based on people outside the country sending currency in, so I think the idea was to use a curre

Apparently, a fairly high percentage of El Salvador's economy is based on people outside the country sending currency in, so I think the idea was to use a currency that makes it relatively cheap and easy to send money from the US to El Salvador. That said, since they're on the US Dollar anyway, I think it might have made more sense to use a stablecoin like GUSD or DAI or something.

asdff 5y ago
If its USD to USD in this case, why not mail a check? I wonder if you could even just scan a check and email it and use a mobile bank app to deposit a printed copy. Or even have the US relative log into the Salvadoran relatives bank account and do it all within the U.S.
- woah 5y ago
  You should let the El Salvadoreans know about all these ideas, might save them a lot of trouble
- tombert 5y ago
  Well, I mean, mailing a check takes a long time, certainly longer than sending some bitcoin would take, even if it was free. Emailing a scan could work, but wouldn't that be completely trivial to abuse? If someone gets a Gmail password, they could just photoshop a the check to empty out your relative's account with very low effort. I think blockchain kind of solves these two particular problems; the money transfers are relatively quick (around 20 minutes for bitcoin), and you have all this cryptographic goodness to minimize the potential for fraud.
  - asdff 5y ago
    It shouldn't matter how long it takes to mail after the first check is mailed, right? If the relative in the US is sending money every biweekly pay check and it takes 9 days or whatever to mail a check, the relative in El Salvador is still getting a check every two weeks, just nine days later on the calendar than payday.
  - hackingforfun 5y ago
    Lightning network transactions occur in seconds, if not milliseconds [1]. https://lightning.network/ https://lightning.network/
- int_19h 5y ago
  Checks are not common outside of US and a few other countries. Checks from another country especially can be a hassle to cash, may take a long time (as in weeks!), and may require paying a percentage fee to the bank.
  - tombert 5y ago
    They're not terribly common even within the US. I refinanced my house recently, and and I had to order a new checkbook from my bank to do it, because I couldn't find the one they gave me four years ago. Every time I do have to write a check, I always have to "figure it out" again, which isn't exactly rocket science, but is a testament to how little I write checks. Like most of the world, I use credit cards or debit cards or a cash sending app.
    - asdff 5y ago
      yet you can still cash a check and write a check even if its not popular.
    - int_19h 5y ago
      They're common enough for banks to universally support them. E.g. if you get compensation from some company (due to overpaid bill, legal settlement etc), it'll usually come as a check by default - and sometimes that's the only available option. I've also dealt with landlords and home repair providers that would only accept checks.
- gus_massa 5y ago
  At least here in Argentina, if you have a check of a bank od USA, only a few banks accept it and they take a huge cut.
xtracto 5y ago
I think at some point I read that given the amount of the GDP that remittances are in El Salvador, and the % that Western Union and similar services charge for each transfer, they calculated that a good chunk of the GDP was being left in these transfer services. In the case of Mexico, remittances would be 3.8% of the GDP, and the WU fee is 8% [1], which means that 0.3% of the GDP is being left in the table. In El Salvador I think it is about 20%, which would mean that 1.6% of the GDP is being left in the WU and similar services. [1] https://www.westernunion.com/us/en/send-money/app/price-estimator https://www.westernunion.com/us/en/send-money/app/price-esti...

asdff 5y ago

If its USD to USD in this case, why not mail a check? I wonder if you could even just scan a check and email it and use a mobile bank app to deposit a printed copy. Or even have the US relative log into the Salvadoran relatives bank account and do it all within the U.S.

woah 5y ago
You should let the El Salvadoreans know about all these ideas, might save them a lot of trouble
tombert 5y ago
Well, I mean, mailing a check takes a long time, certainly longer than sending some bitcoin would take, even if it was free. Emailing a scan could work, but wouldn't that be completely trivial to abuse? If someone gets a Gmail password, they could just photoshop a the check to empty out your relative's account with very low effort. I think blockchain kind of solves these two particular problems; the money transfers are relatively quick (around 20 minutes for bitcoin), and you have all this cryptographic goodness to minimize the potential for fraud.
- asdff 5y ago
  It shouldn't matter how long it takes to mail after the first check is mailed, right? If the relative in the US is sending money every biweekly pay check and it takes 9 days or whatever to mail a check, the relative in El Salvador is still getting a check every two weeks, just nine days later on the calendar than payday.
- hackingforfun 5y ago
  Lightning network transactions occur in seconds, if not milliseconds [1]. https://lightning.network/ https://lightning.network/
int_19h 5y ago
Checks are not common outside of US and a few other countries. Checks from another country especially can be a hassle to cash, may take a long time (as in weeks!), and may require paying a percentage fee to the bank.
- tombert 5y ago
  They're not terribly common even within the US. I refinanced my house recently, and and I had to order a new checkbook from my bank to do it, because I couldn't find the one they gave me four years ago. Every time I do have to write a check, I always have to "figure it out" again, which isn't exactly rocket science, but is a testament to how little I write checks. Like most of the world, I use credit cards or debit cards or a cash sending app.
  - asdff 5y ago
    yet you can still cash a check and write a check even if its not popular.
  - int_19h 5y ago
    They're common enough for banks to universally support them. E.g. if you get compensation from some company (due to overpaid bill, legal settlement etc), it'll usually come as a check by default - and sometimes that's the only available option. I've also dealt with landlords and home repair providers that would only accept checks.
gus_massa 5y ago
At least here in Argentina, if you have a check of a bank od USA, only a few banks accept it and they take a huge cut.

xtracto 5y ago

I think at some point I read that given the amount of the GDP that remittances are in El Salvador, and the % that Western Union and similar services charge for each transfer, they calculated that a good chunk of the GDP was being left in these transfer services. In the case of Mexico, remittances would be 3.8% of the GDP, and the WU fee is 8% [1], which means that 0.3% of the GDP is being left in the table. In El Salvador I think it is about 20%, which would mean that 1.6% of the GDP is being left in the WU and similar services. [1] https://www.westernunion.com/us/en/send-money/app/price-estimator https://www.westernunion.com/us/en/send-money/app/price-esti...