Bitcoin is put forward as the obvious replacement for Western Union for people working in rich countries to send money back to their families in poor ones – even for the present-day case where you need to convert to and from bitcoins at each end.
The bit where you transmit money between countries is not expensive at all – you pay Western Union to maintain services, cash on hand and so on for the “last mile” of the journey. With Bitcoin, the conversion fees at each end usually add up to more than the banking network would charge; the ten-minute transmission time (if it’s that fast) turns out not to make up for the delays in purchasing the coins for the sender or selling them for the receiver; the price volatility is extreme enough to affect the amount transmitted. The remittance case could only work if Bitcoin were already a generally accepted international currency.
Rebit.ph is making a serious attempt at Bitcoin-based remittances to the Philippines, but has foundered on the volatility of Bitcoin prices and difficulties in exchanging the bitcoins for pesos at the far end. They eventually had to set up a Bitcoin exchange just to have sufficient conventional currency on hand.
