Crypto Remittances
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Do Crypto-Based Remittances Really Work?

There’s been a lot of talk on the fintech scene recently around the capabilities of crypto, and especially in regards to remittances. Do they work? Are they worth your time? What are the benefits? Are they even to be trusted?

These are all very important and very intriguing questions in the modern age of financial services, and through this report originally obtained from, we’ll attempt to answer them.

El Salvador doesn’t make international news very often.

Yet the small central-American nation demanded the world’s attention in June 2021, when its government announced an ambitious plan to make Bitcoin legal tender, meaning the cryptocurrency will have to be accepted as payment for goods and services (unless a business is unable to obtain the technology needed for the transaction.) Bitcoin now looks set to become the country’s national currency.

El Salvador is making the move for a variety of reasons – not least the ambition of president Nayib Bukele to turn the country into a crypto investment hub.

But a primary consideration in popularising digital currencies was the amount of money El Salvador receives in remittances each year: an estimated $5.9 billion in 2020, almost a quarter of its GDP.

Bukele argues that Bitcoin will provide a new and more attractive avenue to send this money into El Salvador, which adopted the dollar after its currency collapsed in 2001, and open up financial services to the 70% of El Salvadoreans without bank accounts.

Money Transfers Cost 7% On Average

Although fees can be reduced by going through a money transfer company, sending money abroad can be a complicated, slow, and costly process. The UN reported in 2019 that currency conversions and fees eat up 7% of the amount sent through remittances each year.

And remittance corridors aren’t created equally. In El Salvador, the average cost is 3%. The world’s largest remittance flow is between the US and Mexico, where the average cost is 4.22% of the transaction. And senders paid an average 8.9% to send money into sub-Saharan Africa in the last quarter of 2019.

Do cryptocurrencies, which can be sent through the blockchain rather than any third party, offer a way to lower these costs?

How To Send Money Abroad in Cryptocurrency

Sending remittance payments in crypto, in simple terms, goes something like this:

The process of sending cryptocurrencies internationally
The process of sending cryptocurrencies internationally

If you’re not already familiar with buying and selling crypto, those steps may raise a few questions, so let’s talk through them.

Step 1: Buying the Coins 

You can do this in a variety of ways, such as through a centralised cryptocurrency exchange – these are private companies that allow you to trade coins and require registration and identification.

There are many options out there with various pros and cons, so this will require some research if you’re not already trading.

For example, Coinbase allows you to buy and sell a variety of currencies and has strong security and transparent pricing, but has higher transaction fees than other services unless you pay for the premium version, according to Investopedia.

Meanwhile, Cash App is an option with a user-friendly interface that makes it easy to buy and sell Bitcoin – but no other cryptocurrencies.

Some sites, like Wirex and Paxful, are specifically geared towards people who want to transfer money in crypto.

Pay particular attention to transaction fees and withdrawal fees when you choose an option.

Step 2: Sending the Coins

In order for this method to work, the recipient will also need their own cryptocurrency exchange/digital wallet.

Your ability to transfer crypto won’t be impeded if the recipient uses a different exchange to you, as you’ll only require the address of their digital wallet. You can scan the QR code associated with the address, or paste their public address. But be careful in this regard, it’s crucial you don’t make a mistake here, as crypto exchanges are irreversible.

The specifics may vary depending on your method of exchange, but you should then follow its instructions for sending.

The speed of transaction can take anywhere from a few minutes to a few days – this may depend on how high a transaction fee you pay.

Step 3: the Recipient Sells the Coins

The value of various cryptocurrencies in fiat money is notoriously volatile.

If the recipient waits too long to exchange their coins, it’s possible they could lose out considerably if the price drops. Conversely, if the price rises, they could end up with more than you intended to send.

You should also consider exchange rates at the time of making the transfer, since the money will be exchanged twice – into the cryptocurrency when you buy it, and back out of it when they sell it.

The recipient could, of course, also keep the cryptocurrency and spend it directly (in the limited places it’s possible to do so) or hold it as an investment.

Is Sending Remittances Through Cryptocurrencies Safe? 

There are risks around every corner of the process, though these shouldn’t necessarily scare you off.

As step 3 shows, the biggest risk is the element of uncertainty over how much the coins will be worth when the recipient sells them. Then there’s the risk of you making a mistake when making the transaction, as trades cannot be reversed and you are unlikely to find a recourse to get it back.

However, if you use a major crypto exchange, the transaction and your money will be secure.

The pros and cons of Crypto-based remittances
The pros and cons of Crypto-based remittances

What Are the Benefits of Using Cryptocurrency To Make International Money Transfers? 

With so many pros and cons associated with the already complex process of crypto-based remittances, it wouldn’t be irrational to ask the question “what’s the point?”

To gain a better understanding of this, the team at the aforementioned crypto exchange Paxful explains.

Artur Schaback, COO and co-founder, Paxful
Artur Schaback, COO and co-founder, Paxful

Artur Schaback, Paxful COO and co-founder, said the main benefits are usually cost, with crypto exchanges avoiding the high transaction fees and unfavourable exchange rates of some traditional providers; speed, because transactions can be done at any time on any day, and can take as little as a few minutes; and the access provided for people who may not have a bank account or may live in areas where payments are censored by governments or corporations.

“Sending a cross-border payment is not always easy, especially for people living in countries where there is low access to financial services or the government places restrictions on its citizens sending and receiving money,” Schaback explains.

Sending through crypto to markets such as Ethiopia, Schaback adds, can “heavily undercut what traditional services charge, as the seller can typically earn money by trading Bitcoin.”

Schaback believes economies are currently only scratching the surface when it comes to use of crypto. In higher-income economies, crypto is primarily seen as an investment asset.

Yet with financial education and more widespread adoption, he believes crypto exchanges will provide a way to complement the gaps in the current financial system.

In the case of El Salvador, recipients of remittances in Bitcoin should soon be able to hold onto those coins and spend them directly, without the need to exchange them back into fiat money.

A Verdict From

As this report was originally obtained from, their opinion on the state of crypto-based remittances comes as highly valued.

Jonathan Merry, Founder and CEO,
Jonathan Merry, Founder and CEO,

“Cryptocurrency exchanges are certainly an interesting new way of transferring money abroad, and can be useful for sending money to countries that are difficult to transfer money to due to sanctions or their financial system, like Iran,” says Jonathan Merry, founder and CEO of

“If the recipient has a specific reason for wanting the money they are owed in cryptocurrency then it’s clearly also a good option. Perhaps they want to invest in a currency anyway, or believe they can make a profit on the exchange.

“If both the parties in the exchange want to experiment with transferring money through crypto, and can afford to potentially take a loss on the transaction, there are secure ways to do so.

“But for the majority of transactions between easy-to-access markets, customers may wish to stick with traditional money transfer providers – at least until cryptocurrencies are more widely accepted as payment.”

The quality and costs of popular digital banks varies based on many factors, like location, laws and of course on what’s happening on the outside world – crypto having no small role on the banking evolution over the last years.


  • Tyler is a fintech journalist with specific interests in online banking and emerging AI technologies. He began his career writing with a plethora of national and international publications.

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