HomeSending MoneyIs crypto the future of money transfers to Mexico?

Is crypto the future of money transfers to Mexico?

Remittances –money sent to a country from its citizens living abroad – are a vital part of Mexico’s economy.

They make up a lower share of its gross domestic product (GDP) than some neighbors, at around 4% in 2020. In Belize, that figure was 7.4%, in Guatemala, it was 14.7%, and in El Salvador, it was a massive 24.1%.

However, by overall amount, Mexico receives the third-highest total in remittances in the world, behind only India and China.

That amount is growing rapidly. In 2014, remittances clocked in at under 2% of GDP, and the number of households receiving remittances rose from 3.6% to 5.1% between 2010 and 2020. And while World Bank data is only available to 2020, domestic figures show remittances grew by almost 27% in the first 11 months of 2021 and are forecast to have surpassed $50 billion for the year.

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Crypto growth

At the same time as remittances have been on the rise, Mexico has gained attention for its growing embrace of cryptocurrencies.

Crypto ownership in Mexico is around 2.5% of its population (totaling 3.1 million people), according to crypto payment service Triple-A. That does not put it among the top countries by this measure, which includes Ukraine (12.73%), Russia (11.91%), Venezuela (10.34%), and Kenya (8.52%).

However, Mexico’s locally-founded crypto exchange, called Bitso, has increased to more than 2 million users, most of whom are based in the country. Recent research from the Ponemon Institute found that 40% of Mexican companies were looking to implement some kind of Blockchain-based technology, and 71% of these were focused on cryptocurrency. Analysts have suggested the country may follow El Salvador in making Bitcoin legal tender.

A better transfer option?

Citizens have cited “onerous banking restrictions” in Mexico (introduced in recent years to combat crime and money laundering but impacting regular citizens too) as one of the reasons for crypto’s appeal, particularly when buying goods online.

“Difficulties transferring money by bank to and from Mexico mean many people have to use money transfer services and websites, which can come with high usage fees and slow transaction times,” said Jonathan Merry, CEO of

“There are pros and cons to transferring money using cryptocurrency, and some of the pros include lower transaction fees – with the right provider – and super-fast transactions that can happen at any time. Combined with the rise of non-bank institutions for sending money into Mexico and the fact that Mexico is very much a country to watch on the global crypto scene, we are sure to see crypto’s usage increase for remittances,” Merry said.

Pilot potential

One of the world’s biggest crypto exchange platforms, Coinbase, has launched a pilot scheme targeting this market. It will overcome some of the issues with technological barriers by giving the recipients of transfers a redemption code to cash out at 37,000 retail locations throughout Mexico. It has also pledged to be cheaper than traditional remittance services and process transactions in a matter of seconds.

“The Coinbase scheme will definitely be attractive to people. One downside of sending remittances through crypto is that whoever is on the other end may not have the extensive technological know-how. Having somewhere they can take a code to exchange for fiat money will take some of the stress away,” Merry said.

“However, anyone looking to transfer remittances through crypto should be very cautious of the fact that currency values can be hugely volatile within a day, so there is a risk of losing money on the exchange.

“They should also note that transactions are irreversible, and depending on the service they use, it may be difficult to access customer support. Only those who have researched their options and feel confident with the service's usability should attempt to send remittances or other types of a money transfer using crypto,” he added.

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Yasmin Purnell
Yasmin Purnell
Yasmin Purnell is a Content Writer and Editor for Yasmin has a wealth of experience writing across a range of topics within the personal finance, student, and business niche. Yasmin joined the team with the one main mission to provide accessible financial, career and business information and advice for all.