Bancoagrícola And Flexa Partnership, Build Bitcoin Payment Network In El Salvador

Flexa payment network, help build a bitcoin payment system in El Salvador. (photo: doc. unsplash)

JAKARTA - Bancoagrícola, the largest financial institution in El Salvador, will step up its Bitcoin adoption policy in the country following its partnership with digital payment gateway Flexa.

According to Flexa's announcement on Thursday, September 9, Bancoagrícola has signed a deal with a crypto payment network to allow Bitcoin (BTC) transfers for the bank's customers, including retail clients and merchants.

As part of the partnership, Bancoagrícola customers can make credit card payments in US dollars via Flexa or other Lightning Network-enabled wallets such as Chivo and clair. According to the release, this payment will not attract any additional fees and will cover the loan and merchandise.

Flexa recently added support for Lightning payments with a feature reportedly aimed at merchant clients. Bancoagrícola's partnership with Flexa came about after Bitcoin officially became a legal tender in El Salvador.

Reports of retailers in El Salvador accepting Bitcoin became commonplace on social media as Cointelegraph reported that McDonald's outlets accepted BTC as payment.

According to President Nayib Bukele, If El Salvador's Bitcoin adoption policies prove successful, global money service providers such as MoneyGram and Western Union could lose up to 400 million US dollars per year.

Indeed, remittances accounted for a significant proportion of El Salvador's gross domestic product of 23% in 2020 alone. Meanwhile, 70% of El Salvador's residents reportedly receive money from abroad.

Back in August, the American Central Bank for Economic Integration, or CABEI, stated that adopting Bitcoin as a legal tender could have a positive impact on remittances in the region. At the time, CABEI pledged to assist the country in establishing a technical framework for BTC adoption and complying with international anti-money laundering standards.

El Salvador's Bitcoin law is not without its obstacles as the majority of the country's population is reportedly against the move. Global financial entities such as the International Monetary Fund have also warned against adopting Bitcoin as the national currency.