Salvadorans are beginning to appreciate bitcoin’s advantages for settling cross-border payments without intermediaries. According to info from the Ministry of Foreign Affairs, U.S.-based company Compass Coffee completed the purchase of a batch of Salvadoran coffee using bitcoin at fair prices and sidestepping intermediaries.
This represents an advancement in the use of the currency for commodity settlements, as the Salvadoran Ambassador to the U.S. Milena Mayorga highlighted that the producers received competitive prices without third parties taking a cut from the deal.
Mayorga also pointed out that all companies could use bitcoin for this kind of settlement in El Salvador. Jorge Cruz, a Salvadoran coffee producer, stated that the price reached for this transaction was two to three times higher than the one quoted in U.S. markets.
The transaction was settled in less than 10 minutes using bitcoin. Before, the Salvadoran producers had sent a test batch for the counterparty to measure the coffee quality and approve the proposed prices.
This settlement resulted from a series of meetings that the Foreign Ministry had with Compass Coffee in 2022, seeking national coffee to reach U.S. soil, pairing producers and buyers in these countries.
Chas Newman, Compass Coffee COO, talked about the Salvadoran Embassy’s role during this exchange, stating that the institution facilitated getting the needed products, allowing producers to open the connections to keep growing in the U.S. In addition, Compass Coffee will allow coffee buyers to send a tip directly to the producer’s bitcoin wallets.
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