Topic: Kyrgyzstan bitcoin experiment promises migrant workers big savings (Read 1045 times)

A bunch of ATMs that do that would be a big leap toward remittances like that. Put a few in poorer areas of countries like the Philippines and watch things take off like a rocket. I buy a gallon of coconut oil every 4 months or so from a company that pays locals to manufacture the coconut oil. I would love to be able to pay the families in the coconut oil business directly so they get more of what I spend and without a middle man the product would cost a lot less. Win-win.

here your "employee" is outside Kyrgyzstan. And the ATM is  inside.
For your last step "Family member takes bitcoins and trades for local FIAT" they'd need an ATM that works
the other way around, like I said in my  post.  The currently available ATM may be useful for many things but does nothing to facilitate "sending money home to Kyrgyzstan"

I think you misunderstood the concept. 

The idea is:
Employee gets paid in FIAT
Employee goes to ATM machine and trades FIAT for bitcoins
Employee sends bitcoins to family member through Bitcoin network like any other bitcoin payment
Family member takes bitcoins and trades for local FIAT

That's the whole process as I would understand it, especially since sending FIAT directly means things like Wire Transfers, international money orders, etc, which get pretty costly at times compared to Bitcoin transfers. 

Kuwait, Kenya, Kyrgyzstan... it's nice to see how Bitcoin grows by helping people whose lives are not that easy and comfortable as ours...

To impact how they transfer money home, the ATM has to work the other way around. Convert BTC into the local currency (or dollars).

Bitcoin can be used for exact this use in so many different countries. Most of Africa, big parts of Asia, some eastern EU countries etc....alot of workers migrating around the world that pay high fees just to send hard earned money to their families.

In the corner of a small pizzeria in central Bishkek, Kyrgyzstan's capital, an experiment is unfolding. Central Asia’s first and only bitcoin ATM converts dollars into the world’s most popular cryptocurrency. The machine – which looks like one of the city’s ubiquitous electronic pay terminals – offers a way to convert hard currency into a digital medium that is increasingly used in online transactions.

That could impact how Kyrgyzstan’s estimated one million migrant workers transfer their earnings home, says the machine’s owner, Emanuele Costa, an Italian financial analyst. The World Bank estimates that last year migrant remittances totalled the equivalent of 31% of Kyrgyzstan’s gross domestic product (GDP). Most of that money, several billion dollars, was transferred through expensive, fee-based services such as Western Union and Zolotaya Korona (a Russian payment system whose name means 'golden crown'). Costa, a former analyst with Goldman Sachs, sees bitcoin as a low-cost, secure and confidential alternative.

Bitcoin, invented by a group of anonymous Internet users in 2009, is the first and most prominent digital cryptocurrency to gain wide circulation. Not controlled by national governments or banks, bitcoin offers a peer-to-peer encrypted payment system that can be readily converted into cash or, increasingly, used in exchange for products or services. Fees, when they exist, are agreed upon by users and are usually nominal. Bitcoin’s value fluctuates based on supply and demand; one bitcoin is currently worth about $642.

Though Costa is a staunch believer in bitcoin’s potential, he admits that it faces some hurdles. Foremost is a lack of understanding.

Building on his previous work developing financial-literacy projects for the University of Central Asia, Costa has begun organising bitcoin meet-ups as an informal, though structured, means of educating interested people about the potential of bitcoin and other peer-to-peer financial platforms to improve and simplify their economic lives.

Costa views Kyrgyzstan’s relative weakness in regulatory systems as, paradoxically, a strength. "Due to the lack of legacy [financial] systems and the government’s openness to trying new things, Kyrgyzstan is a very attractive place to implement a bitcoin facilitated transactional system," Costa told EurasiaNet.org.

But the Moscow-led customs union – which Kyrgyzstan is expected to join by next year – could spell trouble. Already, members Belarus and Kazakhstan have taken cautiously negative views of bitcoin and other cryptocurrencies. Russia’s prosecutor general has warned that "systems for anonymous payments and cyber currencies… are money substitutes and cannot be used by individuals or legal entities." None of the current customs union members have issued outright bitcoin bans, but anything perceived to challenge centralised state control is unlikely to survive for long.

What’s more, in a part of the world as opaque and corruption-riddled as entral Asia, transparency activists might find bitcoin worrisome because there is no way to trace bitcoin users’ transactions.

But Costa believes that the technology behind bitcoin cannot be legislated away. Bitcoin only represents the first wave of game-changing technological innovations to come, he says. And his investment is proof of his enthusiasm. Although he does not expect to recoup his investment in the machine for several years – he earns a nominal fee off each transaction – what matters to him is that in the machine’s first two weeks of operation, even without advertising, several users have tried it out. That’s proof, Costa says, that bitcoin can find a comfortable home in Bishkek

Source " http://www.theguardian.com/world/2014/jul/08/kyrgyzstan-bitcoin-experiment-migrant-savings "