What's Happening with Bitcoin in Mexico?

Could Mexico Pay for Trump's Wall with Bitcoin?

Mexico, Bitcoin and the Wall.

Donald Trump may one day get his wall.  It may keep people in, or out of America's southern border.  One thing it won't do, however, is to keep bitcoin from having an impact on our southern neighbors.

Among the many benefits of using a digital currency such as Bitcoin is its ability to be an effective remittance tool for those involved in cross-border transactions.  In 2014, Mexico received over $23 billion in remittances.

Much of this had to do with Mexican workers in the US sending money back home to family in Mexico.

In 2015, this number increased to nearly $25 billion.  Nearly all of these remittances are sent by electronic transfer.  Western Union is the leader here and has been an innovator in this space for over one hundred years. Many Bitcoin believers see the remittance space as fertile ground for the digital currency.  

A bitcoin exchange in Mexico is called BitSo, and its VP of Payments, José Rodríguez recognizes the potential in the Bitcoin remittance market but sees obstacles such as education and easy to use applications to further usage by those in and out of the country.

These obstacles are further compounded by regulations put into place by the Mexican government to address the drug trade and prevent money laundering.  This has resulted in strong Anti-Money Laundering regulations and the Bank of Mexico has stepped in to release a warning on the use of bitcoin by associating the use of bitcoin with other "illicit operations, including fraud and money laundering."

Much of these messages have in fact, raised the awareness of bitcoin to those in the hispanic community, which is now the most likely ethnic group to hear about bitcoin.  Given that Mexico and Texas is the largest remittance corridor in the world, there's a growing need for bitcoin ATMs and other methods of gaining bitcoin, which is seen as a lower cost alternative to other dollar-denominated services being used in the country.

The reach of Donald Trump into this situation goes beyond just his desire to build a physical wall between US and Mexico.  Trump recognizes the huge remittance need in the country and feels that the US loses millions of dollars from illegal immigrants' money transfers.  Within his immigration plan is an increase in fees on these remittances.

On the Trump for President website, it states, "Mexico continues to make billions on not only our bad trade deals but also relies heavily on the billions of dollars in remittances sent from illegal immigrants in the  United States back to Mexico (US$22 billion in 2013 alone) […] Mexico must pay for the wall and, until they do, the United States will, among other things: impound all remittance payments derived from illegal wages."

Perhaps this is the answer that all of the media is seeking regarding how Trump will get Mexico to pay for the wall.  Whether or not that pans out, the reality is that the remittance issue is a big one and there are many seeing it as an opportunity for bitcoin.

One of these is Abra, which is the world’s first peer-to-peer digital cash, money-transfer network and global bitcoin remittance application that seeks to enable Mexican immigrants to transfer cash instantaneously, without any transfer fees or bank accounts.

The CEO of Abra, Bill Barhydt has a vision of a company that will allow the use of smartphones, "to allow any other Abra users to deposit cash or withdraw cash from anywhere in the world.”

As long as there are cell towers, no wall will be big enough to keep out those transactions.