The Mexican cryptocurrency exchange Bitso recently reported that remittance rates through cryptocurrencies are on the rise.
According to the startup’s founder, Daniel Vogel, within the last six months, the use of digital assets as currency sent from Mexicans to loved ones back home has increased at a rate of 15 percent. Last week’s transfer in crypto amounted to US$11.5 million.
At that speed, Vogel estimates that by year’s end, five percent of all remittances from the United States to Mexico will be in cryptocurrencies.
In 2018, remittance flows into Latin America and the Caribbean increased by almost 10%, with Mexico receiving the largest amount of these payments in the region with over $35.7B transacted every year.
The benefits of crypto-remittances
The rising trend of crypto reliance comes from the desire to keep the money as intact as possible when wiring it from one place to another while keeping a preferable price Mxn. We all know what happens when traditional Financial Service Providers get their hands on any amount of money; they take a cut.
The standard rate is about four percent of the amount being sent. Not to mention currency conversion rates from banks can also subtract from the sum. All this greatly distorts the budgeting plans of those sending money and their families who receive it.
It’s also estimated that remittance sending via cryptocurrencies, using Blockchain Technology is faster and doesn’t take a toll on the wiring fee. This is possible since transferring parties are reportedly charged less than one percent over the amount being sent.
A big market in Latin America
Now, let’s take this equation and factor in that are over 28.5 million people from Latin America residing outside the country in which they were born. Then, consider that in 2018 there were over US$85 billion in family remittances.
Crypto adoption in the LatAm region is rising as 70% of its population remains unbanked; Last month, Huobi also announced an exchange in Argentina.
This adds up to a market plagued with a whole lot of fees and commissions, making the region a hotbed eager for payment solutions. For families in this region, critical liquidity for payments is a priority.
Take note, the rising trend for crypto in remittances through a Bitcoin Exchange can be observed not only in Mexico but in other countries like Venezuela as well. In Venezuela particularly, Nicolás Maduro has the Central Bank offer banking services using ledger technology for their the Petro, their national crypto coin accepted by government financial service providers.
Still, no official numbers have yet to be released.
All things considered, fintech and cryptocurrency may be a transparent alternative for that hard-earned money. Plus, it’s reassuring to know that startups like Bitso are complying with Mexico’s latest fintech law Yet, users should know that the government doesn’t regulate cryptocurrencies. User beware; for this represents a risk that every family shall have to manage on their own.
- Bitso managed to anticipate the strong attention that cryptocurrencies would receive in Latin America.
- In addition, since its founding in 2014, Bitso has evolved to become more and more attractive by adding a diverse cryptocurrency offer, by incorporating APIs to the platform and, above all, by creating Bitso Alpha, the regulated trading platform that gives you access to global cryptocurrency trading markets and allows you to conduct a technical analysis in an intuitive way.
- They can be transferred, transacted and diversified more easily, which gives, in addition to ease of operation, greater control over personal finances, and they allow one to acquire global assets directly with pesos from bank accounts, without the need to violate any legal restriction.
- It should be noted that, beyond macroeconomic issues, Bitso stands out for the ease with which our products can be accessed and used, as well as how intuitive both the Bitso Alpha app and platform are, along with the global scope of our services.
- This illustrates the maturity of the Argentine crypto ecosystem, since, despite the enormous growth stablecoins have experienced – in the specific case of DAI, according to our records, operations increased 7,058% between February and August 10, 2020 – users choose a variety of books, which shows their knowledge of the importance of diversification and the particularities of different cryptocurrencies.
- Bitso offers Bitso Transfer a service that is used to send and receive payments in crypto for free.
- Bitso, one of the biggest cryptocurrency exchanges in Latin America, has hit 1 million users prior to its upcoming launch in Brazil.
- Operating since 2014, Bitso is Mexico’s first crypto exchange and is the largest crypto trading platform in the country.
- In October 2019, major U.S. crypto exchange Coinbase and Ripple invested an undisclosed amount in Bitso to help it expand to Argentina and Brazil