 I'm here. In a small country you've probably never heard of, investigating a problem most people just aren't aware of. I think we have even most key virgins outside Caverns. In fact, more of them living abroad than on the islands. We have more people abroad than here. But this problem isn't just specific to here. It can also be found here, here and in fact all over the world. And this problem could end up being one of the defining use cases for Bitcoin. The problem that I'm getting at is remittances, people living abroad sending money back home. Now this might not seem like a mind-blowing revelation, that will of course come later. But as I talked to locals, navigated a currency system in shambles and endured middlemen fevery, I stumbled upon deeper economic issues that plague islands like Cape Verde. And as so often happens I realised the solution for many of these problems was sitting right in front of me. And it could be applied not only here but in similar environments around the world. I'm global reporter Joe Hall, bringing you another Cointelegraph documentary. Welcome to the island of Sal, Cape Verde. Let's see if Bitcoin can fix things here. Welcome to Sal, one of the ten small islands that make up the nation of Cape Verde. Cape Verde is roughly the size of the state of Rhode Island, or Lichtenstein for the Europeans, and is situated in the Atlantic Ocean off the coast of West Africa. Now Cape Verde suffers from a common characteristic among small island developing nations. More of its citizens live abroad than at home. And do you have relatives that live abroad, for example? Yes, I have a lot of relatives living in the Europe, America. I have a brother that lives in Portugal and some other cousins that live in Europe. In fact, the International Organization for Migration estimates that there are twice as many Cape Verdeans living overseas than domestically. In the state of Massachusetts alone, there are nearly 70,000 Cape Verdeans. Now that's three times the population of Sal, the island that I'm currently on. Knowing this, it will come as no surprise that a whopping 15% of Cape Verde's GDP is from, you guessed it. Remittances. Let me put it this way. 15 cents on every dollar of Cape Verde's economy is from work carried out thousands of miles away by relatives living in places like the United States, Europe, Africa and Brazil, where salaries are usually higher and jobs are abundant. To put that in perspective, the world average percentage of GDP for remittances is 5%, three times less than that of Cape Verde. But that isn't the main issue. The real problem lies in the process of sending money back home, which is multiplied by the sheer quantity of money being sent home. And that problem is mainly caused by these guys. Let me show you just how bad it is. Because more Cape Verdeans live outside the country than on the islands, that means money is being sent home every day and money transfers like this guy are everywhere. Cape Verde is one of the most expensive places in the world to send money to. Western Union on average charges a fee of roughly 10% of the total amount you send. So if you send home $200, Western Union takes 20. And that's not forgetting the cost of having to drive into town, wait in line and potentially be told, sorry madam, we've just run out of cash, we've just closed. The machines are buggy today, the money hasn't arrived yet. All common occurrences of banks around the world and particularly in Cape Verde. And still, every day people queue up trying to receive money or send their hard-earned cash home. I was dumbfounded by this experience. So I decided to call up a good friend of mine to help better understand the situation. So this is André Locher, an entrepreneur who brought Bitcoin to the island of Mededa, some 500 miles north of where I am. What would happen if he tries to convince the president of Mededa to embrace Bitcoin? Mededa is another small island developing nation that shares many of the same economic and diaspora concerns as Cape Verde. A lot more Mederans live outside of Mededa than in. It's estimated to be 1.2 to 1.4 million Mederans in Venezuela. You know, as you know, the communists brewing party in Venezuela, for example. So they make the life very, very hard for remittances. So people get creative. There's a lot of black markets going on. They buy dollars on the black market. They send it to, you know, countrymen, banks that they have in Florida, for example, in Miami, that belong to Venezuelan people. And from there, they send it to Portuguese banks. But again, they lose a lot in fees, a lot of them in exchange. The rates in the black market are horrific. So it's terrible. The island's official currency is the Scudo, but even things in the supermarkets are priced in euros. Just look. The island now has effectively three different circulating currencies, which means three different exchange rates and a whole bunch of other inconveniences. This is in a Scudo. 2,000 of these are worth roughly 20 of these. In Cape Verde, you can use either of these and sometimes these to pay for goods and services. So of these options, which would you choose? Probably these two, right? And that right there is a problem. It's what many developing nations around the world are currently facing. That means Tills often run out of physical change to give customers, or they give back the wrong change or confused change, i.e. a mix of euros and the Scudos and sometimes dollars. Paying with euros for 850 Scudos. Euros and Scudos back. Bizarre. Wild eh? Where in the world does that happen? While finding the right change can be a bit of a nuisance, it actually handicaps commerce. If you attempt to pay for a small ticket item with a 20 euro or even a 10 euro note, the cashier might straight up reject the sale. Why? Well, there simply isn't enough cash in the register to give you the correct change. It's a peculiar but pointed situation where having too large a note prices you out of the purchase while the merchant misses out as well. Like many other smaller currencies around the world, from the Norwegian Krona to the Vietnamese Dong to the Tunisian Dinar, the value of this Scudo is collapsing into the US dollar. That's despite the fact that the Scudo is pegged to the Euro. And that's pegged in quotations because Cape Verde is experiencing higher levels of inflation than the Eurozone. The physical money issues are compounded by the introduction of Mastercard and Visa services. I was surprised to see that in lots of shops and businesses they simply would not accept plastic. Or they were charged upwards of 4% to the customer, not the business if you elect to pay my card. As a result, credit cards are mostly used by tourists while Cape Verdeans stick to cash. To get a better understanding of this issue, I talked to the first business owner to accept Bitcoin on Cape Verde, Renato Abarchi from Ocean Club Cape Verde. Now Renato is one of the island's business moguls and a respected member of the community. He hopes to roll out Bitcoin acceptance to other parts of the island. Carton de crédito cobra a T4%, que es un valor muito relevante. Por eso que muchos comerciantes aquí quieren repassar esta presentage a un cliente que compra, a pesar que es vedado por parte de lei. Cuando una empresa quiere utilizar un carton de crédito para ofere ser un propio servicio, assina un contrato donde es evidente, evidenciado más veces, que es absolutamente vedado repassar el costo a un cliente. A costumanza de poes aquí es un poco diferente. Bitcoin supera este problema. Es una gran oportunidad, porque elimina cualquier tasca de transaccion que aquí podría ser, también, ainda más aproveitado en relación a cuanto puede ser aproveitado en Europa. ATMs are another example of why cash rains king in Cape Verde. Even if the bank offers an attractive interest rate, the high cost of withdrawing money outweighs the implied savings. Now ATMs charge as much as 5% to withdraw money, regardless of the card issuers' nationality. Plus, the ATMs regularly run out of cash, and the dispensaries hosted in banks are closed on evenings, weekends, national holidays, and they're only working during working hours. So if you work a nine-to-five job, you have to take time off to use banking services. As the financial inconveniences, the fees, and the frustration mounted, I got that funny feeling I've experienced in other parts of the developing world. Why should people pay a tax to the likes of Western Union to send their hard-earned money to families back home? Why pay a 4% fee to a corporation like Mastercard to process the payment for a loaf of bread or some fish on an island some 5,000 miles away from the United States? Why be handicapped by a currency when the till runs out of coins? Why put up with soaring inflation? Surely there's a better way, a better way of saving, spending, and storing money. And no, I'm not talking about leverage loans, CDOs, trading, or ETFs, but merely the ability to spend, save, and move money around the world without being taxed for the privilege. As you can probably guess, I was starting to think about Cape Verde and how it could use Bitcoin. Let me break it down. Bitcoin is a uniquely digital form of money that lives on the internet. It has an incredibly low barrier to entry. All you need is a phone, which all Cape Verdeans have, and an internet connection to start sending, saving, and spending money. Fortunately, mobile phone penetration is very high, it's over 100% in 2020. Plus, all of Cape Verde's islands have three and sometimes 4G internet connectivity, more than enough to use the Bitcoin network. As a remittance tool, Bitcoin's the lightning network charges fees of a fraction of a cent to send money around the world. Bitcoin never runs out of cash and it always gives the correct change because there is none. You can simply scan or tap an invoice and if you have enough Bitcoin, you pay it. Simple as that. Moreover, given the low fees on the lightning network, using Bitcoin for day-to-day transactions can benefit the business owner and the customer alike. Merchants can sidestep mastercards high fees and they can, if they choose, pass on that saving to the customer. Yes, the price per Bitcoin is incredibly volatile, but it does not debase the way fiat currencies do. Over time, it has gained in value against legacy monies such as the dollar, the euro, and certainly the escudo. What's more, places around the world that have adopted Bitcoin, such as El Salvador and Logano in Switzerland, have seen an increase in Bitcoin-related visits, investments, as well as business expansion. Cape Verde could certainly do with a similar boost. The Cape Verdeans I spoke to prefer to store their cash at home rather than in financial institutions so they are already familiar with controlling their own money. And one of Bitcoin's mantras is the idea that you can be your own bank. Nonetheless, as ever, Bitcoin's stumbling block is education and the hurdles posed by transitioning to a fully digital age. In conversation with Mr. Africa, a tour guide on the beach in Sao, I showed him how to download a Bitcoin Lightning Network wallet. I sent him some sats, and he was indifferent. Sense, yeah. Or 2,500 sats, yeah. What do you think? I've been interested in Bitcoin, but since not working here, I've not had much interest in it, but it's something nice. In cash economies, there is a cognitive leap between physical cash and digital sats, or satoshis, the smallest amount of a Bitcoin. However, the proverbial penny started to drop as he slowly came around to the idea. The world is like a small village digital. So it's like the fastest way of doing transaction, which everybody would like to. I'm not an exception. So I would like to have knowledge about it and also how I can do transaction.