Topic
B2B Commerce
Published
August 2025
Reading time
3 minutes
Accelerating the shift to stablecoins
The potentially unintended impact of the “One Big Beautiful Bill”
Accelerating the shift to stablecoins
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In July 4, 2025, President Trump signed the “One Big Beautiful Bill Act,” which includes a new 1% federal excise tax on certain outbound remittances. The tax applies to transfers funded with cash, money orders, cashier’s checks, or similar instruments; bank-account and card-funded transfers are exempt. Earlier drafts floated higher rates (3.5%–5%) and different scopes, but the final law settled at 1%. The broader package relies on immigrant and visitor-focused fees to help fund enforcement priorities.
Why Does This Matter?
The new 1% remittance tax is less a revenue engine than a friction shock to U.S.-origin corridors, especially Mexico and LATAM, where price sensitivity is high and cash channels are common. The US has consistently been the top remittance-sending country with total outflow of $93 billion in 2024.1 The United States sent ~$62 billion in remittances to Mexico in 2024, 96.6% of the total received by the country.2
By raising costs on cash-funded transfers there is a real incentive to pushing senders off formal rails and into informal or crypto routes, weakening transparency, AML/KYC controls and receive-side FX liquidity. The Center for Global Development (CGD) estimates that a 1% price increase will lead to a ~1.6% drop in formal remittances, implying outsized losses in big corridors and sharper pain where remittances are a large share of GDP.3
The law’s cash-only scope also skews the burden toward senders who rely on money-transfer operators, often the unbanked/underbanked who face a “cash payout premium.” Policymakers should anticipate softer household consumption and slower micro-investment. The response will likely be to cut domestic fees and expand digital rails.
From Cash To Crypto
The tax incidence will reshape corridor economics. A likely knock-on effect of the U.S. remittance tax is a faster shift to stablecoin rails. Stablecoins already account for a large share of on-chain activity globally and are increasingly used for cross-border payments. In 2024, stablecoins processed $27.6 trillion in transactions, surpassing Visa and Mastercard’s combined transaction volume by 7.68% .4 This rapid adoption signals that stablecoins are no longer just an alternative, they are becoming the preferred method for cross-border payments and financial transactions.
Industry data describes 2025 as a breakout year for stablecoins in cross-border flows, with major remittance players (e.g., MoneyGram) enabling USD coin (USDC) cash-in/cash-out at retail locations. Pegged to assets like the U.S. dollar, stablecoins eliminate volatility, ensuring the amount sent is the amount received. Unlike slow, costly traditional remittances, stablecoins enable near-instant, low-fee transfers, providing diasporas a reliable and affordable way to send money home. Transaction fees are often more than 50% lower than traditional rails.5 We expect to see providers steering banked customers toward compliant, account-based stablecoin corridors. Regulators will have to balance the efficiency gains against AML/KYC risks that accompany rapid on-chain adoption.
The Rails Race Is Only Just Beginning
This 1% levy isn’t a revenue policy so much as a routing policy: it will push U.S.–origin cash corridors to whichever rails minimize friction fastest. Whether that shift strengthens the formal system or hollows it out will be decided by the speed of credible, compliant digital alternatives, especially account-based stablecoin corridors with cash-in/cash-out at the edge. If providers can migrate a meaningful slice of cash senders before the tax comes into effect, volumes will stay formal; if not, expect leakage to informal and lightly supervised channels.
Have a different opinion on how the remittance tax will play out? Please reach out, we’d love to hear it!
Endnotes
[1] Lucidity Insights, The Role of Remittance Outflow Countries 2024 in Global Financial Support, 2025
[2] BBVA Research, Mexico: Record in remittances, 2025
[3] CGD, Even At 1% The US Remittance Tax Hits Poor Countries Hard, 2025
[4] Lisk, Breaking Borders: How Stablecoins Are Replacing Traditional Remittances, 2025
[5] Pymnts, Cross-Border Payments Cost Could Be Cut by Blockchain, 2024
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