Why Trump’s Clampdown on Remittances Will Force Mexicans to Bitcoin
The US White House is reportedly planning to target remittance payments made by illegal Mexican immigrants in an attempt to curb the inflow of illegal arrivals through the southern border. If passed, those changes may cause immigrants in the US to turn to alternatives, such as Bitcoin.
White House to Cut Remittances to Mexico
The White House is reportedly going to target remittance payments which made by illegal US immigrants, the Daily Caller reports citing a senior administration official.
These plans are coming amid a larger shakeup taking place at the Department of Homeland Security (DHS), as an attempt to curb illegal immigration. Reportedly, thousands of migrants are arriving on a daily basis at the southern US border, claiming asylum.
The statement comes following a proposition from former Kansas State Secretary of State, Kris Kobach. Speaking on the matter of ending remittances from illegal Mexican immigrants in the US, he outlined:
The threat I propose is one that actually helps us if we follow through on it. That is the threat of ending remittances from the majority of people in the United States from Mexico who are here illegally. That is a threat that we could carry through on that actually helps our economy because the money is not sent home, it stays in circulation in the U.S. economy and helps rev up our economy. It’s actually a good thing if we follow through.
It’s not the first time Trump has turned his sights to remittances from the US to Mexico. Back in 2017, he threatened to tax or to halt them as means of funding to build a wall along the entire southern border.
Why It’s Good For Bitcoin
It’s unclear exactly how much money illegal Mexican immigrants in the US send home. However, according to one report, 2018 saw a total of around $33 billion sent in remittances from the US to Mexico. Moreover, this is one of the largest sources of foreign capital in Mexico.
Prohibiting Mexican immigrants in the US to send money back home with conventional means is perhaps likely to cause those people to look for alternatives, rather than halting remittances in general.
In fact, this was reiterated by Kobach himself, who said:
There will always be ways to circumvent things you put in place. Yes, if we stop wire transfers and bank transfers, there may be ways to get around it and one way to get around it is to send cash in the mail.
And while putting cash in an envelope and sending it across the border is, indeed, an alternative, Bitcoin provides for a much more safer and quicker transfer of value. It is also a politically nuetral and borderless financial network where no central authority can impose capital controls.
For these reasons, Bitcoin has already become a preferred alternative in countries facing political and economic crisis. This includes use-cases such as remittance payments in Venezuela and other Latin American nations.
Moreover, Venezuela even took measures to profit from the growing market, imposing a 15 percent fee on all Bitcoin and cryptocurrency remittance payments.
In any case, this seems like yet one more reason for which Trump could turn out to be Bitcoin’s biggest champion.
What do you think of the US plan to halt remittances to Mexico? Don’t hesitate to let us know in the comments below!
Images via Shutterstock