A bank in Argentina has moved to Bitcoin as opposed to SWIFT for its cross-border payments, citing lower rates and faster transfers as its motivation.
“The service allows you to reduce costs associated with international transfers as there are no international banks as intermediaries. The logistics solution allows for a reduction in the time it takes to send or receive transfers up to a maximum of 24 hours,” the company said in a statement on its site.
Although there’s no mention of Bitcoin in any of BMV’s marketing material, it chose Bitex—a company that settles blockchain-based payments using Bitcoin’s chain—as its partner.
Payments sent through Bitex are made via a concierge-style service, which converts the transaction to Bitcoin, then converts it into the recipient’s currency and completes the transaction using a local bank.
The move was made shortly after Argentina raised interest rates to 40% in an attempt to combat the amount of capital that is leaving the country. However, this has not helped the Argentinian peso, which continues a steady decline.
This escalating crisis has many people attempting to send their funds outside of the country for sheer survival.
Banco Masvendas may be attempting to satisfy this demand by offering a cheaper way to transfer money away from Argentina through a blockchain-based solution.
To these people, Bitcoin’s recent sharp decline in value is irrelevant. It’s the technology itself that they’re interested in.
If enough Argentinians use this solution, we might see the cryptocurrency’s trade volume trend upwards, helping reduce its volatility to some extent. However, we must keep in mind the fact that all of this activity will come from the purchase of Bitcoin merely for its immediate sale.
Another solution that would help counteract the effects of a declining peso would be the 4,000 cryptocurrency-ready ATMs that Odyssey Group is installing around the country because of the central bank’s recent relaxation of regulations.
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