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Comment by tombert | Hacker News Reader

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.

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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-esti...

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.

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.

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.

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.

yet you can still cash a check and write a check even if its not popular.

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.

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.

Lightning network transactions occur in seconds, if not milliseconds [1].

https://lightning.network/

You should let the El Salvadoreans know about all these ideas, might save them a lot of trouble

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.

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