President Donald Trump’s proposed remittance tax, which would levy additional fees on money being sent outside of the United States in an effort to curb immigration, could have the end effect of driving cryptocurrency adoption.
While much of the geopolitical focus of cryptocurrency has been on the development of Brexit and the potential impact on the Euro and British Pound, a story developing in the United States could have widespread ramifications for the industry. According to data compiled by analytics firm Coin Dance, which looks at Bitcoin and cryptocurrency use around the world, peer-to-peer exchange platforms geared towards sending money abroad have increased in volume since the announcement of President Trump’s proposed remittance tax.
The initiative is geared towards penalizing immigrants working in the United States and sending money to their home countries. As outlined by Forbes cryptocurrency contributor Billy Bambrough, the policy could make cryptocurrency an attractive alternative to fiat as a way to avoid having to pay additional taxes and fees. Compared to the traditional route of money remittance, cryptocurrencies such as XRP offer increased speed and severely reduced fees. If President Trump moves forward with his proposed tax, the avenue of sending money via digital assets will become an even more alluring method for the growing use case of crypto-based remittance.
Coin Dance has highlighted several peer-to-peer platforms such as Localbitcoins, Paxful and Bisq as a popular exchanges for users looking to send remittance via cryptocurrency. According to the data Coin Dance compiled, both Mexico and Venezuela established new all-time highs in trading volume over the last week. Mexican users sent over $500,000 in cryptocurrency through the exchange in the seven days leading up to April 13.
While the Trump administration has yet to give conclusive details on the remittance tax, the assumption is that the plan will follow what has already been proposed by former Kansas secretary of state, Kris Kobach. Kobach explained the remittance tax in an interview with Breitbart last week,
“The threat [to illegal immigrants] I propose is one that actually helps [the U.S.] 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.”
White House spokesman Hogan Gidley told the Associated Press that the Trump administration is looking to remittance taxes as a potential method of de-incentivizing immigration, calling it a “top priority,”
“It is a top priority for the administration, as has been for two years, to reduce overstay rates for visas and the visa waiver program — and it’s well known that the administration is working to ensure faithful implementation of immigration welfare rules to protect American taxpayers.”
While the tax is likely to make up a portion of President Trump’s re-election campaign for 2020, the policy could ultimately result in increased discussion and adoption for cryptocurrency as an alternative to fiat and imposed financial policies.