Coinbase Sees Crypto Remittances as a Threat to Western Union

  • Beginning in Mexico, with potential expansion
  • The service is free until the end of March

Coinbase Global Inc., the largest cryptocurrency exchange in the United States, has announced its intention to enter the international money-transfer market, which is dominated by companies such as Western Union Co.

Coinbase has announced the launch of a free pilot program for sending cryptocurrency funds to friends and family in Mexico. Receivers can exchange the tokens for pesos at participating locations throughout the country or invest the funds in a Coinbase account. After March 31, the service will become fee-based.

Coinbase did not reveal the price, but stated in a blog post that it will be “still 25-50 percent cheaper” than traditional cross-border transfers.

“We recognise that this is a global problem.” While we’re starting in Mexico, we’ll consider other regions where customers face similar challenges in the future,” Coinbase said in a blog post.

The push into remittances is part of Coinbase’s strategy to diversify its revenue during a difficult period for cryptocurrencies, which has resulted in a drop in trading volumes on exchanges. Coinbase is working on launching a marketplace for non-fungible tokens, as well as expanding its decentralized finance services.

According to Allied Market Research, the global remittances market is expected to reach $700 billion in 2020 and $1.2 trillion by 2030.

Last year, Meta Platforms Inc., Facebook’s parent company, began testing a program for sending remittances from the United States to Guatemala using its cryptocurrency digital wallet.

Coinbase said it partnered with Remitly for the Mexican venture, which has relationships with over 37,000 retail outlets, including Bansefi, BanCoppel, Oxxo, Soriana, and Telecomm Telegrafos.

Disclaimer: These are the writer’s opinions and should not be considered investment advice. Readers should do their own research.

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