Bitcoin is often looked at as the perfect candidate to take on the remittance business model as we all know it. Services such as Western Union and MoneyGram have a tight hold on this market and get away with charging outrageous fees to customers. However, an opportunity is presenting itself in Argentina, where continuing devaluing of the Argentine Peso has led to a remittance limit through traditional means.
Argentine Peso Remittance Limits of US$150 Per Month
While most people are accustomed to using fiat currency for remittance purposes, that solution might not be viable much longer in Argentina. Ever since the Argentine Peso exchange rate is no longer kept afloat artificially, the currency has been devaluing at a stellar pace. It goes without saying this creates a lot of financial strain on the country’s economy.
So much even that companies like Western Union are unable to operate under normal circumstances. Sending money abroad from Argentina has become subject to a monthly transfer limit of US$150, which is next to nothing. The reason for this is simple: the value of one Argentine Peso is declining so fast, it is next to impossible to sell the currency to exchanges at a proper value.
A maximum limit of US$150 per month to move funds out of the country will not help the average citizen all that much. Keeping in mind how the previous limit was set at US$2,000 per month, there are very few options to liquidate Argentine Pesos at a proper rate. Selling the currency back to the government will never be beneficial to citizens as the government maintains different rates compared to the black market..
Bitcoin Is A Possible Solution To The Problem
This creates a huge opportunity for Bitcoin in Argentina, which are [sometimes] cheaper to obtain due to these same capital controls enforced upon Western Union. But there is an interesting twist to how Bitcoin works in Argentina, as it is the only way for remittance recipients to get more value compared to what the sender paid in Argentina, according to a post on Reddit.
Whether or not this financial crisis in Argentina is creating the Bitcoin killer app so many people have been waiting for, remains to be seen. One thing’s for sure, though: the volatile Argentina Peso is helping Bitcoin in ways that would not be possible otherwise right now.