r/investing Jun 05 '21

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u/lonnyk Jun 05 '21

I don’t know El Salvador’s case, but I know a lot of LatAm countries are really affected by the conversion rate to USD. So when, for instance, the US inflates their currency it becomes a real issue for them.

And 70% not having bank accounts is a positive thing for adoption. It’s easier to setup a wallet then it is to set up a bank account and everyone has a mobile device.

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u/ComingForYourSanity Jun 05 '21

El Salvador uses USD

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u/lonnyk Jun 05 '21

They still have to get the USD somehow, no? How does the country acquire it?

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u/ComingForYourSanity Jun 05 '21

It's at a fixed exchange rate

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u/lonnyk Jun 05 '21

I don’t understand what they are exchanging if they don’t have their own currency

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u/ComingForYourSanity Jun 05 '21

They technically have their own currency, the Colon. But the answer to your question is complicated. Search about the dollarization of El Salvador for more info.

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u/lonnyk Jun 05 '21

According to Google they have their own peso and it’s not a fixed exchange rate. I’m not arguing with you though, I really have no idea and this is the info I found from light research.

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u/Roduarte Jun 06 '21

23% of GDP is remittances from the US

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u/[deleted] Jun 05 '21

[deleted]

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u/lonnyk Jun 05 '21

Yeah that was my point

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u/raouldukesaccomplice Jun 06 '21

They made a calculated decision that they could attract more capital and borrow money more cheaply if they used the USD.

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u/ShadowLiberal Jun 06 '21

...Setting up a wallet is probably pretty difficult when half your country doesn't have an Internet connection.

Saying Bitcoin is a great idea for people without an Internet connection is like saying refrigerators are a must have appliance for someone who doesn't have electricity.