Western Union recently announced it would be suspending U.S. dollar transfers to Cuba, due to sanctions from the United States. This may only increase the attractiveness of sending remittances with cryptocurrencies, which are much more resistant to geopolitical tensions.
According to the World Bank, Latin America’s formal remittance market is around $96 billion. But traditional services like Moneygram or Western Union can come with high commissions, unfavorable exchange rates, limited office hours, long transmission times and daily exchange limits.
Crypto remittances are a different story. I’ve sent money from Venezuela to family members in Colombia and Spain, using the peer-to-peer platform LocalBitcoins. These transactions are often faster and cheaper than their traditional finance counterparts, with fewer steps to send money, at least if you know how to take advantage of the platform.
First, I would buy bitcoin with bolivars through a bank transfer in LocalBitcoins, then I would look for sell offers of BTC in Colombia or Spain. I would choose the offer with the best exchange rate for the currency my relatives use. After the other party transferred the currency to my relative’s bank account, I would release the BTC. This whole process takes less than an hour, and the platform charges a 1% fee to whoever published the trade offer. There are other platform options as well, such as Binance P2P and LocalCryptos. (Disclaimer: In 2021 I will be hosting a program on YouTube that is sponsored by LocalBitcoins).
Crypto remittances organized on messaging platforms like Whatsapp, Telegram and WeChat can be more competitive. Members of the group set their…
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