As was to be expected, the situation between Mexico and the United States has continued to deteriorate. Last night, the Mexican peso started tumbling after the President canceled a meeting with President Trump. This news caused the peso to lose 1.2% of its value, after gaining on the US Dollar yesterday morning. Things are getting out of hand rather quickly for Mexico, and it appears Bitcoin may be the only currency left to keep the country alive economically.
Mexican Peso Continues Downward Path
This entire debacle has been a topic of substantial media attention over the past few months. Donald Trump, now the 45th President of the United States, has made it a point of focus to end the “one-sided trade deficit” with Mexico. Either he will build a wall, or start taxing remittances from the US to Mexico moving forward. This concept has created an uneasy relationship between both countries, and it looks like things only get worse as more time progresses.
A meeting between the two presidents had been scheduled for next week, yet Enrique Nieto decided to back out. He informed the White House the scheduled meeting will not take place. Once this news broke, the value of the Mexican Peso started sliding downwards, eventually resulting in a 1.2% loss. Then again, President Trump had issued a similar sentiment on Twitter a few hours earlier.
Moreover, according to President Trump, construction of the wall on the border between the US and Mexico may commence within a few months from now. It is a very bold plan that will effectively set the world back a few decades. While it is evident Mexico needs to come up with an alternative solution, their national currency continues to lose value nearly every week. Consumers and enterprises will need to hedge against future volatility, and obtaining US Dollars is pretty much out of the question for everyone right now.
Bitcoin presents a more than viable alternative to the US Dollar. Anyone in Mexico is – in theory – capable of obtaining Bitcoin without too much friction. Moreover, it could be in the best interest of the Mexican government to explore cryptocurrency opportunities as well. It is unlikely the Peso will be replaced by the Bitcoin any time soon, though.