Coinbase, a prominent exchange based in the United States, has announced that it will now allow remittance recipients in Mexico to pay out funds received through its service in local currency. This is the company’s first step into the Mexican remittance market, with consumers able to cash out at over 37,000 convenience stores and other places throughout the country.
Mexicans Can Now Cash Out Cryptocurrency Remittances in Pesos via Coinbase
Coinbase, the popular cryptocurrency exchange, said this week that it would enter the remittances market in Mexico for the first time. While the exchange previously permitted clients to send cryptocurrency to any other Coinbase user worldwide, it will now allow recipients to cash out funds in their local fiat currency, in this case, the Mexican peso.
Coinbase claimed that it has arranged for the exchange of these remittances in over 37,000 convenience shops and other places nationwide. Remittance receivers will be able to complete transactions by using the app to generate a unique redemption code. The move is in response to Coinbase’s goal of removing friction from crypto-to-fiat exchanges.
Coinbase anticipates that this use of cryptocurrency will enable the company to compete with established traditional remittance solutions. This tool will be available for free until March 31, 2022.
Remittances and Fees
However, Coinbase will begin charging fees for these services after the aforementioned date. The exchange stated that it will levy a “modest fee that is nevertheless 25%–50% less expensive than standard cross-border payment options.”
The exchange notes that it views remittances as a worldwide issue, alluding to the possibility of expanding this service to additional nations in the future. The exchange stated as follows:
“While we’re starting in Mexico, over time we’ll consider other regions where customers face similar challenges.”
Remittances are a multibillion-dollar sector in the US/Mexico area. According to World Bank and Bank of Mexico data, Mexican families received $42.17 billion in remittances during the first 10 months of 2021, the majority of which came from the United States. Almost $5 billion was sent to Mexicans in October alone, largely via money orders and electronic transfers.
Disclaimer: These are the writer’s opinions and should not be considered investment advice. Readers should do their own research.