If Trump’s bill is passed as it stands, it would introduce a 5% tax on remittances affecting over 40 million people. Analysts warn that this could spur the use of alternative options, such as crypto, to ensure these funds reach their destination while avoiding the proposed tax.
‘Big, Beautiful Bill’ Remittance Tax May Spur Crypto Adoption Resurgence
While crypto’s remittance use case has failed to gain traction, this may be about to change. The Republican priority bill, referred to as the “big, beautiful bill” by President Donald Trump, proposes introducing a 5% tax on remittances sent by non-U.S. citizens to their home countries.
This could affect over 40 million people in the U.S., including recipients of various visa programs who wire part of their income to support their families abroad. The measure has already faced rejection from countries like Mexico, which benefit greatly from the flow of funds from the U.S.
Heavily criticizing the bill and its effects, Mexico’s President Claudia Sheinbaum stated:
Remittances are the fruit of the efforts of those who, through their honest work, strengthen not only the Mexican economy but also the United States’, which is why we consider this measure to be arbitrary and unjust.
Bank of Mexico’s figures indicate that in 2024, remittances to Mexico will exceed $64 billion. The potential application of the tax could generate over $3 billion if remittance volumes remain close to last year’s levels.
Nonetheless, even if the bill is applied, analysts believe these capital flows will find a way to reach their destination, evading this tax. “Some senders would find ways to send money differently, through unauthorized channels,” said Manuel Orozco, director of the Migration, Remittances, and Development Program at the Inter-American Dialogue.
Crypto might be one of these “unauthorized channels” that these migrants could use to avoid getting slashed by the U.S. government. Coin Center, a crypto advocacy center, highlighted that self-hosted wallets would be outside the scope of the bill, given that these are not considered remittance‑transfer providers, as there is no intermediary facilitating these tasks.
Read more: BIS Study Shows Low-Value Bitcoin Transfers Reshape Remittances Amid High Traditional Costs
