Donald Trump and his administration are looking to find ways to increase pressure on illegal immigration and countries from which people overstay their short-term U.S. visas as he gears up for what's likely to be an immigration-heavy re-election campaign—and it could push people towards bitcoin.
Trump, who will be seeking his second term as U.S. president in 2020, is weighing a remittance tax on money sent home by people living in the country illegally, potentially making bitcoin and cryptocurrencies more attractive to people as they seek to avoid government monitored channels of sending money across borders.
Bitcoin use may already be up due to Trump's potential plans for a remittance tax, with several countries that rank highly for immigration to the U.S., including Mexico and some South American countries, reporting record levels of bitcoin trading over the last week.
The data, gathered by Coin Dance, which monitors bitcoin and cryptocurrency use around the world, and first reported by bitcoin trade news site Bitcoinist, shows bitcoin trading volumes on peer-to-peer exchange platforms Localbitcoins, Paxful, and Bisq, in certain regions has been spiking since the news of Trump's plans for a remittance tax first broke.
Both Mexico and Venezuela set all-time trading records on the Localbitcoins exchange in the seven days to April 13, with Mexico moving more than $500,000 over the period via the exchange.
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White House plans for a remittance tax could resemble proposals laid out by former Kansas secretary of state, Kris Kobach, it has been reported.
"The threat [to illegal immigrants] I propose is one that actually helps [the U.S.] if we follow through on it," Kobach told right-wing website Breitbart last week. "That is the threat of ending remittances from the majority of people in the United States from Mexico who are here illegally. That is a threat that we could carry through on that actually helps our economy because the money is not sent home, it stays in circulation in the U.S. economy and helps rev up our economy. It’s actually a good thing if we follow through."
Meanwhile, White House spokesman Hogan Gidley told the Associated Press news agency that targeting remittances is a possibility.
"It is a top priority for the administration, as has been for two years, to reduce overstay rates for visas and the visa waiver program — and it’s well known that the administration is working to ensure faithful implementation of immigration welfare rules to protect American taxpayers," Gidley said.
U.S. officials reported a record 53,000 families were apprehended on the southern U.S. border in March, though Democrats argue the Trump administration is exacerbating the problem.
Using bitcoin and cryptocurrencies to send money across borders more cheaply and quickly than banks and traditional money transfer services has long been one of the most promising use cases for crypto.
However, banks and money services have been quick to adopt new technologies over recent years, allowing them to improve their services and remain competitive.
Government sanctions on remittances could though prove to be the trigger that pushes people towards bitcoin and cryptocurrencies, as capital controls have done in other parts of the world.
"There will always be ways to circumvent things you put in place," Kobach added.