Coinbase, a leading U.S.-based exchange, has announced it will now allow remittance receivers in Mexico to cash out the funds received through its service in local currency. This marks the first foray of the company into the Mexican remittance business, allowing customers to cash out in more than 37,000 convenience stores and other locations in the country.
Coinbase Allows Mexicans to Take Crypto Remittances in Pesos
Popular cryptocurrency exchange Coinbase announced this week that it is making its first foray into remittances in Mexico. While the exchange already allowed customers to send cryptocurrency to any other Coinbase user around the world, it will now offer fund recipients the ability to cash out funds in local fiat currency, in this case, the Mexican peso.
Coinbase announced it has arranged for these remittances to be exchanged in more than 37,000 convenience stores and other locations around the country. Remittance receivers will be able to make the transactions by generating a unique redemption code in the app. The move is a result of Coinbase seeking to eliminate friction in crypto-to-fiat exchange.
Coinbase expects this use of cryptocurrency to allow the company to compete with traditional remittance alternatives already in the market. The use of this tool will be free until March 31, 2022.
Remittances and Fees
However, after the aforementioned date, Coinbase will start collecting fees on these services. The exchange announced it will charge “a nominal fee that’s still 25–50% cheaper than traditional cross-border payment solutions.”
The exchange says it recognizes that remittances are a global problem, hinting at possible future expansion of the service to other countries. Regarding this, the exchange said:
While we’re starting in Mexico, over time we’ll consider other regions where customers face similar challenges.
The remittance trade in the US/Mexico corridor is a multi-billion dollar business. According to figures from the World Bank and Banco de Mexico, Mexican families received $42.17 billion in remittances in the first ten months of 2021, with most of those funds coming from the United States. In October alone, nearly $5 billion was sent to Mexicans, mostly via money orders and wire transfers.
