Cryptocurrency recipients in Mexico can now receive their funds in pesos through Coinbase, the largest cryptocurrency exchange in the United States. It’s Coinbase’s goal to disrupt the $700 billion worldwide remittance sector with its new product release. Coinbase intends to expand the service beyond Mexico in the near future.
Approximately $700 billion will be remitted by foreign nationals and expatriates living in the United States to loved ones back home in 2020, according to World Bank stats. Traditional cross-border payment methods still face a number of difficulties. For example, sender fees can rise from 6% to 7%, and recipients can only receive cash in their local currency. As a result, they do not have the option to save their money, grow it, or protect it from inflation.
Thus, Coinbase has made it possible for Mexicans to exchange their cryptocurrency holdings for the country’s own currency. Low fees for sending and withdrawing cryptocurrencies, as well as the ability to store funds in a variety of ways, mean that recipients can keep more of their money. The borderless nature of cryptocurrency plus the fact that there are fewer intermediaries than there are in traditional currency transactions make cryptocurrencies like Bitcoin a popular choice for international money transfers.
Over 37,000 real retail outlets and convenience stores in Mexico are now accepting cryptocurrency payments in the form of Mexican pesos (Mexican money) from Mexican citizens. In addition, Coinbase customers can save or invest their money. A standard fee of 25-50 percent less than typical foreign payment alternatives will apply after March 31. However, Coinbase claimed that the new service is free to use until then.
Innovating the Digital Payments Industry
Even as Coinbase continues to expand into traditional financial services, the company is preparing for any trade or purchase that may come its way. Non-fungible tokens (NFTs) can now be purchased by more people thanks to the exchange’s partnership with Mastercard last month. Most users have had a difficult time purchasing NFTs. As a result, Coinbase and Mastercard are collaborating to streamline the payment process for digital assets like ether.
Coinbase purchased FairX, a US-based CFTC-regulated futures exchange, in December of last year to open up the crypto economy to retail and institutional investors. U.S. customers were permitted last year to convert whatever percentage of their paychecks directly into cryptocurrencies such as Bitcoin without any fees from the company.