Cryptocurrency appears to be booming within the Mexican market, however, it is thought that not enough of the world is noticing just how much of a growing trend it is becoming and how popular the market has become with the country’s residents. Indeed, there are a number of reasons why the trend has continued to grow at a rapid rate, with some having cited the “increasingly onerous banking requirements” that are in place within the Latin American country, and evidence suggests many are already following suit.
According to data from the eight months between September 2019 and May 2020, the trading volume of Bitso – Mexico’s leading crypto exchange platform – grew by a huge 342%, whilst they also reported earlier in 2021 that they had surpassed 1 million users on the company’s platform, with 92% of those being Mexican. Taking that data into mind, it is incredible when compared to the figures that are found when looking at the 35 traditional brokerages that are found in Mexico already, as their combined total is under 400,000 active users.
Why has the crypto market boomed in Mexico?
As mentioned, one of the biggest reasons that can be highlighted when thinking about why the Mexican crypto market has boomed is because of the banking requirements that continue to be set. The Mexican government has had real issues in the past of tax evasion and money laundering, which has led to tighter controls, whilst also essentially dismissing crypto as a possible form of legal tender in the near future as it is not a “real currency”. However, Mexicans have started to use crypto because of the benefits digital currency offers them.
Crypto provides holders with anonymity and security that is not offered when using Mexican Pesos, with users able to do what they want without suffering the same restrictions as before. Many are using crypto in a live casino to enjoy their gaming experiences without having to fear losing revenue due to taxation or by having their transaction stopped, whilst others are simply shopping online with the coins as they make things a lot easier. The transfer of money has gotten even more difficult recently, as well, with simple and ordinary transactions also having been made increasingly hard to do. With new banking laws having been implemented in regards to accounts services that hold deposits, many big names have had to stop offering the same services they once did, thus making Mexican’s look for alternative options.
Crypto trading platforms make things easier
One of the major advantages of using crypto is that transactions that are made are generally quicker and also cheaper compared to when they are processed through a financial institution such as a bank. Therefore, it should not come as a surprise to learn that public interest is being driven to these services because of their continued clampdown. Sending money via the traditional methods was also getting rather expensive, especially for Mexican nationals who worked in the US and were supporting their family members at home. For instance, making electronic transfers through bank accounts and services such as Western Union and PayPal’s Xoom involved a number of charges that were seen as incredibly high. Xoom charges up to 4% in transaction fees alone, before making a profit on the exchange rate of each transaction sent to Mexico.
Crypto on the rise as banks falter
Therefore, it should not come as a surprise to learn that the use of cryptocurrency has continued to grow within Mexico, especially when a transaction fee can be as low as 0.1%. Bitso has also claimed that a number of withdrawal methods on its exchange can be free for users, as well. Banks are highly untrusted financial institutions within Mexico by its citizens, as well, with 63.1% of Mexicans 15 or over not owning a bank account. Many workers are now being paid in cash by businesses that are not registered with the Government because there is a lack of trust in credit cards and bank services. Indeed, these traditional financial services are deemed very expensive and would actually make economic life rather difficult for a Mexican if they were to use them. It is incredibly easy to open a digital wallet and these can tend to be free, as well.
It is rather clear and easy to see why the cryptocurrency market is starting to boom within Mexico and why so many citizens are already looking to take advantage of it given the financial laws and regulations that they continue to have to face on a regular basis. It would not be a surprise to see this trend continue to grow further in the future, but whether the rest of the world takes note is something that may just have to remain to be seen.