Trump’s 5% Remittance Tax Could Boost Crypto Adoption

Trump’s Bill May Push Millions Toward Cryptocurrency

Trump’s Big, Beautiful Bill’  May Surge Crypto Market

Over 40 million people will be impacted by a 5% remittance tax if Trump proposal is approved in its current form. In order to guarantee that these payments arrive at their destination without incurring the proposed tax, analysts caution that this may encourage the adoption of alternate methods, such as cryptocurrency. 

The Trump administration proposes to tax outgoing remittances at a rate of 5%. The excise fee on remittance transfers, which would affect millions of people, including those with H1B visas and green cards, is proposed in the President's Trump top priority plan. According to the World Bank, remittances are the transfer of money from one's place of employment back to one's home country.  

What is Trump's "Big, Beautiful Bill"?  

"The One, Big, Beautiful Bill" contains a provision that says, "This provision imposes a five percent excise tax on remittance transfers which will be paid for by the sender with respect to such transfers."   Unless the transferor is a "verified US sender," the remittance will be applied to any foreign remittance. 

"The provision requires that the fee be collected by the remittance transfer providers and the remittance transfer providers are responsible for remitting such tax quarterly to the Secretary of the Treasury," it states.  

Notably, the proposed bill does not establish a minimum limit. This means even small transactions will be taxed unless the sender qualifies as a “verified US sender,” defined as a US citizen or national.  These taxes would be withheld by the remittance service provider at the point of transfer, affecting both traditional bank transfers and NRE/NRO account transactions.

Trump’s ‘Big, Beautiful Bill’ proposes a 5% fees on remittances, potentially driving over 40 million people to seek crypto alternatives to bypass the tax.

If Trump proposal is passed as it stands, Analysts warn that this could spur the use of alternative options, such as crypto avoiding the proposed tax.

This could affect over 40 million people in the U.S., including recipients of various visa programs who wire part of their income to support their families abroad.

With key financial shifts and support for digital assets, this might just be the push needed for mass adoption. 

The proposed "Big, Beautiful Bill" could potentially push millions towards cryptocurrency adoption, highlighting possible implications for crypto markets and regulation.

Nonetheless, even if the proposal is applied, analysts believe these capital flows will find a way to reach their destination, evading this fees. “Some senders would find ways to send money differently, through unauthorized channels,” said Manuel Orozco, director of the Migration, Remittances, and Development Program at the Inter-American Dialogue.  Crypto might be one of these “unauthorized channels” that these migrants could use to avoid getting slashed by the U.S. government.

These migrants may utilize cryptocurrency as one of these "unauthorised channels" for escaping being cut off by the US government. The cryptocurrency advocacy group Coin Centre pointed out that self-hosted wallets would not be included by the bill because they are not regarded as remittance-transfer providers because no middleman is involved in these transactions.

Although the use case for cryptocurrency for remittances has not taken off, this could soon change.