It can be hard to say what sparks people to adopt the latest innovations. Sometimes it is caused by a shifting marketplace, sometimes by changing demographics. In the case of Bitcoin’s latest potential explosion in popularity, it can be traced to the threat of lost options.
President Donald Trump’s unlikely rise to office was full of controversial moments. But none has been better known or more discussed than his rhetoric on immigrants, and specifically those from Mexico, identifying them as potential criminals who need to be vetted or barred from the country entirely via a border wall.
As part of an effort to get Mexico to pay for said wall, Trump targeted the money they send back to their home country.
“Republican presidential candidate Donald Trump’s proposal to block money transfers sent home by Mexicans working in the U.S. [was] an attempt to compel Mexico to pay for a border wall,” reported RT. “With the prospect of losing more than $20 billion in remittances, Mexico would then choose to pay as much as $10 million for a wall, Trump said.”
This threat prompted many to turn to Bitcoin as a way to continue remittance payments under the radar.
“Trump’s thus-unfulfilled plan to block remittances is already proving to be an opportunity to revitalize the digital currency, allowing it to fill the gaps left if mainstream money transfer companies are forced to stop enabling cross-border payments,” according to PaymentsSource. “Using the open-source Bitcoin software without intermediaries could prove an alternative route to funnel money around Trump’s blockade.”
To make Bitcoin all the more appealing, the peso’s value dropped 15 to 20 percent on election day as it became clear Trump would have the opportunity to enact his agenda.
“[Election Day] was our highest-volume day historically, with about $13.5 million [pesos] in purchases,” Pablo Gonzales, the CEO and general director of Bitso, a Mexican bitcoin exchange, told PaymentsSource. “A lot of Mexicans were panicking and buying bitcoin.”
While Gonzalez said that using the digital currency to remit money is essentially the same action as doing so with traditional currency, he also warned of a learning curve that comes with the difference.
“Using the decentralized software as it was originally intended ‘is not very pretty and it’s very complex and not ready for the masses,’ he said. If the masses are pushed to find alternatives, however, that’s what they’ll do,” per PaymentsSource.
Although Mexico is newly emerging as a potential hub for Bitcoin, this isn’t the first time that the digital currency has enjoyed growth thanks to potential policy changes.
“There’s already precedent for this kind of financial maneuvering,” reported PaymentsSource. “In 2012, WikiLeaks supporters in the U.S. were able to get around the politically motivated blockade by sending the secret-exposing nonprofit bitcoin donations.”
Lately, it appears that Trump’s promises that Mexico would pay for a border wall could be much ado about nothing. He has backpedaled, saying that the U.S. would initially pay for the wall and then collect reimbursement from Mexico. Then, he proposed a plan in which the U.S. would pay for the border wall through increased tariffs on goods coming in from Mexico. Regardless of how the wall ends up being funded, the uptick in Bitcoin investment his presidency prompted in Mexico stands, and those who fear a stop to traditional remittance payments have been and will continue to be a boon to the digital currency.