If Trump’s Bill Passes as It Stands, It Could Resurrect Crypto’s Remittance Use Case

If Trump’s bill is passed as it stands, it would introduce a 5% tax on remittances affecting over 40 million people.

A new priority bill proposed by the Republicans may have the unforeseen consequence of spurring the adoption of cryptocurrency. The bill, which is part of President Donald Trump’s “big, beautiful bill,” aims to impose a 5% tax on remittances sent by non-U.S. citizens to their home countries.

This measure, which has already faced rejection from countries like Mexico, could affect over 40 million people in the U.S., including those on various visa programs who typically allocate a portion of their income to supporting their families in their original countries.

The bill, which is a collection of hardline measures like slashing legal immigration by 50%, eliminating birthright citizenship, and increasing the minimum wage to $15 per hour, is a key initiative for the Republican-led House of Representatives.

However, it has faced criticism from both sides of the aisle, with Democrats denouncing its harshness and some Republicans expressing concern over its economic implications.

The priority bill also includes a proposal to introduce a 5% tax on remittances sent by non-U.S. citizens to their home countries. This measure, which is intended to generate billions of dollars in revenue, could have a significant impact on the millions of migrants in the U.S. who regularly send money to their families in other countries.

Heavily criticizing the bill and its effects, Mexico’s President Claudia Sheinbaum stated: "Remittances are the fruit of the efforts of those who, through their honest work, strengthen not only the Mexican economy but also the United States', which is why we consider this measure to be arbitrary and unjust."

According to Bank of Mexico figures, in 2024, remittances to Mexico reached an all-time high of over $64 billion. With the potential application of the tax and considering last year’s volume, the U.S. government could collect over $3 billion from this source.

The bill, which is still pending approval from the Senate, has sparked debate over its potential to hamper the flow of capital from the U.S. to other nations, especially Mexico, the largest recipient of remittances globally.

"We don't want to see a situation where the U.S. is cutting off the flow of capital to other countries, especially at a time when the global economy is facing so many challenges," said Manuel Orozco, director of the Migration, Remittances, and Development Program at the Inter-American Dialogue.

"If the bill is passed as it stands, it would introduce a 5% tax on remittances, affecting over 40 million people. This could spur the use of alternative options, such as cryptocurrency, to ensure these funds reach their destination while avoiding the proposed tax."

Indeed, if the bill is passed, it could have the ironic consequence of increasing the adoption of crypto among these immigrant socioeconomic classes. As Coin Center, a crypto advocacy center, highlighted, self-hosted wallets would be outside the scope of the bill.

This is because the bill specifically targets "remittance transfer providers," defined as institutions like MoneyGram or Western Union, which act as intermediaries in facilitating money transfers. However, in the case of self-hosted wallets, users directly manage their own private keys, rendering these services outside the bill's reach.

"The bill's authors appear to have focused narrowly on traditional remittance services and may not have fully considered the implications for self-hosted crypto wallets, which are not engaged in providing remittance services as defined in the bill," a Coin Center spokesperson noted.

This would make crypto a prime candidate for these migrants to continue sending their savings to their families without getting slashed by the U.S. government. However, it remains to be seen whether this socioeconomic class, which usually performs tasks like cleaning, cooking, and providing care work, would prefer using crypto over traditional remittance services.