Bancoagrícola, El Salvador’s largest financial institution, is set to boost the country’s Bitcoin adoption policy following its partnership with digital payments gateway Flexa.
According to an announcement by Flexa on Thursday, Bancoagrícola has inked a deal with the crypto payment network to enable Bitcoin (BTC) transfers for the bank’s customers, including retail and merchant clients.
As part of the partnership, Bancoagrícola customers can make credit card payments denominated in United States dollars via Flexa or other Lightning Network-enabled wallets like Chivo and Éclair. According to the release, these payments will not attract any additional fees and will cover loans and merchant goods, among others.
Flexa recently added support for Lightning payment with the feature reportedly aimed at merchant clients.
Bancoagrícola’s partnership with Flexa is coming on the heels of Bitcoin officially becoming legal tender in El Salvador.
Reports of retailers in El Salvador accepting Bitcoin are becoming commonplace on social media with Cointelegraph reporting that McDonald’s outlets are accepting BTC as payment.
If El Salvador’s Bitcoin adoption policy proves successful, global money service providers like MoneyGram and Western Union may lose up to $400 million per annum, according to the country’s president.
Indeed, remittance accounts for a significant proportion of El Salvador’s gross domestic product — 23% in 2020 alone — with 70% of the population reportedly receiving money from overseas.
Back in August, the Central American Bank for Economic Integration, or CABEI, stated that adopting Bitcoin as legal tender could impact remittances in the region positively. At the time, the CABEI promised to assist the country in building a technical framework for BTC adoption and complying with international anti-money laundering standards.
El Salvador’s Bitcoin Law is not without opposition as a majority of the country’s population is reportedly against the move. Global financial entities like the International Monetary Fund have also warned against adopting Bitcoin as a national currency.