Ever since the official inauguration of President Donald Trump, the Trump administration signed a series of executive orders. One of the orders include immediate construction of a wall between Mexico and the US, to restrict the migration of illegal immigrants. Upon the completion of the wall, the Trump administration is likely to introduce regulations to restrict the outflow of remittances from the US. The imposition of such an impractical financial policy will spur the adoption of bitcoin amongst expat workers.
Individuals from Mexico travel to the US in hope to financially support their families in their home country. Expat workers that are employed in the US receive their salary in US dollars and send the majority of it back to their families through remittance service providers or outlets including Western Union and MoneyGram.
The global financial market and industry is heavily regulated and overseen by various regulatory bodies. For remittance outlets like Western Union to operate, they need to obtain financial licenses to operate within the US. To obtain a license, all of Western Union’s operations must be in strict compliance with local regulations.
In order to remain compliant with local policies, despite their impracticality, remittance service providers are forced to request users to provide massive amounts of information each time a payment is sent or received. Through long and complex forms, remittance outlets require users to forfeit personal and financial information.
In the past, bitcoin users have made comparisons between the process of settling bitcoin payments and Western Union payments to demonstrate the inefficiency of remittance services.
— Dennis (@Xentagz) January 29, 2017
It isn’t necessarily the complexity of remittance payments that will cause great discomfort to expat workers sending money back home. It is the ability of the government to effectively disallow remittance service providers from facilitating payments between Mexico and the US. Because remittance service providers have precise understanding of the origin of payments, outflow, receiver and sender, it is possible for outlets to deny payments from the US to Mexico.
Bitcoin as Solution
Eventually, expat workers seek out for efficient alternatives. Bank transfers and conventional financial services aren’t viable options as they aren’t compatible with the Mexican market. As mentioned above, remittance outlets aren’t a practical selection due to the influence of the government.
Inevitably, bitcoin will be left as the sole option. Mexican expat workers will migrate from traditional forms of money transfers to bitcoin. By that time, bitcoin remittance networks like Abra will have already established a proper user and consumer base of Abra tellers–users within the Abra network which converts bitcoin to fiat money and vice versa.
In mid-January, Abra announced the global launch of its bitcoin-based network. The network will be up and running within the next few weeks. Abra CEO Bill Barhydt stated that the company is expecting to process tens of millions of dollars on a weekly basis based on current projection.
“We estimate that $30-$40 mln per week are now traded in person in “fiat vs Bitcoin” in over 75 countries. With our support for Bitcoin Traders as Abra Tellers, Bitcoin Traders can now hold Bitcoin in their Abra App but process deposits and withdrawals in any world currency that the Abra App supports,” said Barhydt.
Image Via: HFP