Coinbase, a major US-based exchange, has announced that it will now allow remittance recipients in Mexico to withdraw funds received through its local currency service. This marks the company’s first foray into the remittance business in Mexico, allowing customers to withdraw cash at more than 37,000 convenience stores and other locations across the country.
Coinbase Allows Mexicans to Withdraw Cryptocurrency Remittances in Pesos
Popular cryptocurrency exchange Coinbase announced this week that it was making its first foray into remittances in Mexico. While the exchange previously allowed customers to send cryptocurrency to any other Coinbase user in the world, it will now offer remittance recipients the option to withdraw funds in local fiat currency, in this case, the Mexican peso.
Coinbase announced that it organized the exchange of these remittances at more than 37,000 convenience stores and other locations across the country. Remittance recipients will be able to carry out transactions by generating a unique redemption code in the app. The move is a result of Coinbase’s quest to remove friction from trading cryptocurrencies for fiat currencies.
Coinbase hopes that this use of cryptocurrency will allow the company to be competitive compared to traditional remittance alternatives already on the market. The use of this tool will be free until March 31, 2022.
Remittances and Fees
However, after the mentioned date, Coinbase will start charging fees for these services. The exchange announced that it will charge “a nominal fee that is still 25% to 50% cheaper than traditional cross-border payment solutions.”
The exchange says it recognizes that remittances are a global problem, suggesting a possible future expansion of this service to other countries. In this regard, the exchange stated:
While we started in Mexico, over time we will see other regions where customers face similar challenges.The US/Mexico corridor remittance business is a multi-million dollar enterprise. According to data from the World Bank and Banco de Mexico, Mexican households received $42.17 billion in remittances during the first ten months of 2021, most of which came from US money orders and wire transfers.
