Cross border remittances are a matter of life and death as the Russia-Ukraine war and Afghanistan’s frozen funds have shown us. However, there are plenty of high-stakes use cases for crypto investors even in less precarious financial situations.
I said, don’t cross me!
This naturally raises the question of which crypto might be best suited to a use case involving cross border travel. While many assume Bitcoin or Ether to be the top choices thanks to their market caps and dominance, the truth is that Tether [USDT] boasted the highest 24-hour volume on 24 March, 2022. USDT volume in that time frame was $78.44 billion while Bitcoin was only $29.7 billion.
To that end, a report by the Stellar Development Foundation and Wirex on crypto adoption this year revealed how 9,257 people in the U.K, U.S, Singapore, and Mexico used crypto for their cross-border payment needs. These are diverse countries indeed but it seems that the majority share a hatred for pesky transaction fees. Furthermore, the report stated,
“45% of respondents from the general population group have sent cryptocurrency to somebody in another country.”
A surprising insight from Mexico was that more than the supposedly tech-savvy youth, it was seniors spearheading cross-border payments. The report noted,
“Looking at survey results in Mexico, we saw that cryptocurrency users aged 65 and over are most likely to have sent cryptocurrency to someone in another country.”
So what is the takeaway from these stats? All in all, people use the crypto they deem best for their needs, rather than using crypto specifically designed for purposes like cross-border travel – for example: Ripple’s XRP or even Stellar’s XLM.
In fact, even Ethereum founder Vitalik Buterin has commented on the popularity of stablecoins in Argentina. This perhaps indicates that crypto users with unstable fiat currencies prefer to settle international transfers with less volatile crypto.
Buenos días, Bitcoin!
While the survey discovered that crypto ownership is low in Mexico, El Salvador’s adoption of Bitcoin has spurred interest in the technology and its possibilities. However, one must acknowledge that it isn’t just everyday citizens in Mexico who are using crypto for cross-border payments, but financial giants as well. The Blockchain LatAm Report 2022 by Sherlock Communications stated,
“Remittances are among the main use cases of crypto in Mexico. Bitso alone currently processes over U$ 1 billion in remittance, around 2.5% of all remittances going into Mexico.”
The Mexican exchange reportedly has around four million users, and plans to expand throughout Latin America.