Donald Trump has talked about forcing Mexicans to pay for a border wall with a tax on remittances back home. When Mexicans working in the US send money back home, they’ll have to send a big chunk to Washington for the privilege. The tax would have to be huge to cover the Wall’s cost. People will look for alternatives — such as Bitcoin.
An article on Bitcoinist looks at the prospects for growth in Bitcoin transfers. Before it can tax them, the feds will have to find out. Bitcoin is designed to make that hard.
Sending remittances through Bitcoin isn’t easy for non-technical people. The families in Mexico may need to explain it to their relatives in the US. Seriously, Mexicans seem to be more Bitcoin-savvy than Americans.
Bitcoin is already a popular way to send remittances, but it depends on channels which taxes and prohibitions would impact. Remittance agencies work through Bitcoin, using it simply as a channel to transfer money internationally. Legally, they’re money transfer operators, and most states require a license or bond to be in the business. They’ll have to pay any taxes the government imposes. People will need to find new channels if they don’t want to be taxed to death.
If they don’t have the knowledge to manage the transaction personally, people trying to send money home will need to resort to the underground economy or submit to the taxes. Cheats and crooks flourish in situations like that.
The safest option is for the people on both sides of the border to set up their own Bitcoin wallets. In Mexico, buying and selling Bitcoin can be as simple as going to the local 7-Eleven. Americans don’t have it as easy, but lots of options exist that don’t take a degree in computer science.
The Bitso exchange has 20,000 customers in Mexico and processes $2.5 million a week in transactions. Volabit lets you perform Bitcoin transactions at a 7-Eleven or many other places. Some Bitcoin ATMs are available.
In the US, buying through the Internet is usually the best option. American Bitcoin ATMs are clumsy to use and don’t offer anonymity. CoinDesk describes a variety of ways to buy Bitcoin.
Bitcoin isn’t likely to smash a huge hole in a wall against remittances, but it will help those who can make sense of it. When people face the challenge of supporting their families, they get creative.