THELOGICALINDIAN - Mexicos better banknote cowisunder annoy as Donald J Trump threatens to tax or arrest remittances to the country in adjustment to pay for his bound wall
Following Trump’s executive adjustment to alpha architecture the southern bound wall issued on Wednesday, markets are already demography into account the possibility of a tax on remittances from the U.S. to Mexico. This is already actuality acquainted by such remittance giants as Western Union whose shares dropped 2.44% today.
As a whole, the legacy remittance industry has been adverse increasing competition from fintech and money alteration apps, abounding of which use Bitcoin for remittances. MoneyGram, the better adversary to Western Union, has just been bought by Ant Financial Services Group, which can be a bold banker for the money alteration landscape.
Remittances are the better banknote arrival Mexico has, which surpasses alike that of oil exports (around $23 billion). Between January and November of 2024, $24.6 billion USD entered Mexico through remittances, best of which appear from the United States.
Moreover, Reuters reports that remittances to Mexico added abundantly afterwards Donald Trump was elected, the better jump back March 2006. In November, Mexicans away beatific about $2.4 billion in remittances home, 24.7% college compared to the aforementioned period last year.
Remittances are capital in Mexico’s economy, which has been reeling from Donald Trump’s acclamation victory and probable tariffs on Mexican-produced goods. The Peso has also shed around 20% back Trump’s acclamation achievement in November.
During his campaign, Trump again declared that Mexico would pay for his proposed wall. He common this on January 11th saying,
Since remittances are Mexico’s better banknote cow, Mexican Admiral Enrique Peña declared that they’re basal for civic development and for millions of Mexican families. In result, Peña has canceled a meeting appointed for abutting anniversary with Donald Trump, afterward the controlling adjustment and a cheep by the admiral of the United States:
Although it is cryptic if the ban or taxes would additionally administer to companies that use Bitcoin for remittances, the cryptocurrency will abide the best and best clandestine option to alteration money in and out of any country.
Bitcoin, which has been growing in popularity in the country, can be transferred anon for a negligible fee compared to agent services, which generally allegation as abundant as 20%. To add insult to injury, it is generally that the poorest countries are accountable to the accomplished fees.
Although the “last mile” (i.e. cashing out into bounded currency) in Bitcoin remittances is still an issue, startups like Abra and Spare are arrest this problem, allowing barter to catechumen Bitcoin to authorization at bounded food using a mobile app.
Moreover, back Bitcoin is not affiliated to a specific country, it would not be achievable to tax these transactions, which are bearding and action greater aloofness for the user. Even if Bitcoin affairs from the U.S. to Mexico were somehow to be burdened or banned, such a law would be absurd to accomplish as there is no absolute way of tracking the bounded aisle of this ‘cloud money.’
Thus, if the U.S. does appoint a tax on remittances, Bitcoin and added fintech startups will assuredly rush to ample this $25 billion dollar gap. Simply put, this can be abundant account for Bitcoin, which is accepted to advance in the bosom of geopolitical and economic uncertainty.
Will Mexico more about-face to crypto for remittances if Trump’s behavior are enacted? Share your thoughts below!
Images address of
