Note: The original post on Medium can be seen here
Here are the 4 data points you need to know about the growth of remittances in Latin America and how it is driving crypto is helping Latin America.
Growth in Remittances
This year in Mexico is a record for remittances, it is expected to be over $60 billion dollars. Second highest USD remittances in the world (after India, and has overtaken China).
For 2021, The World Bank reported a 21.6% increase in the region.
For the first time in history, monthly remittances to Mexico surpassed $5B USD in May.
The authors note that:
Today, remittances from Mexicans working abroad represent over 3.8% of the country’s GDP and surpass almost all other sources of Mexico’s foreign income — including tourism, oil exports, and most manufacturing exports.
Mexico should perhaps focus less on celebrating remittances and instead develop opportunities that will decrease the country’s growing reliance on migrants fleeing abroad.
These remittances begin in the US.
Latin America IS THE USA too!
3. 20%, or 1 in 5 of the US are Latin American (if US-based Latin Americans were a country it would be the 5th biggest economy in the world).
With more data here — Latino consumer spending totaled around one trillion dollars in the US in 2021.
Crypto is helping improve remittances
4. In 2021, there was a 600% increase in the use of crypto value received (sending money abroad).
“From July 2020 to May of 2021, the cryptocurrency value received by Latin America increased from under $10 billion to over $60 billion. Still, the dollar remains the most reliable hedge against Latin America’s own inflation challenges.”
*Crypto value received is not only for the purpose of remittances (usually family/friends sending money abroad under $1k), but also for other purposes such as investment. For remittances (amounts less than $1k) it is around 3–4% of the total crypto amount.
How are we helping with Remittances?
The partnership between Stellar and MoneyGram allows for USDC to be fungible for cash in 400k locations in 197 countries, with NO fees because it has achieved efficiencies through the cheap and fast Stellar blockchain.
I would argue that this is the first true disruption to Remittances ever.