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El Salvador's bitcoin partner doesn't have basic licenses

A view of El Salvador.

El Salvador's president is pushing for a bitcoin-based economy.

Photo: Oswaldo Martinez/Unsplash

El Salvador's President Nayib Bukele recently pushed through a law making the country the first in the world to adopt bitcoin as legal tender. But there's a problem: A company it is relying on doesn't have the required U.S. licenses.

Zap Solutions Inc., which operates the Strike digital wallet, doesn't have money transmitter licenses in most U.S. states, according to Decrypt. Strike's website said it is offered in the U.S., except in Hawaii and New York. But Zap only has a license in Washington state. That could mean transactions to or from the U.S. could be illegal.

Remittances, largely from the United States, account for more than 20% of El Salvador's gross domestic product, according to the World Bank. One reason why Bukele has touted bitcoin for the country is the potential to lower the cost of remittances.

 Tomio Geron

Tomio Geron ( @tomiogeron) is a San Francisco-based reporter covering fintech. He was previously a reporter and editor at The Wall Street Journal, covering venture capital and startups. He was also as a staff writer at Forbes covering social media and venture capital, and edited the Midas List of top tech investors. He can be reached at tgeron@protocol.com or tgeron@protonmail.com.

bitcoin el salvador cryptocurrency
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Bulletins