Trump’s Proposed 5% Remittance Tax Could Reshape US-Central America Relations and Boost Crypto Adoption

The proposed 5% remittance tax in Donald Trump’s ’One Big Beautiful Bill Act’ threatens to strain diplomatic and economic ties between the US and Central America. This policy directly targets cross-border money transfers that millions of families rely on for survival, potentially destabilizing regional economies.

Financial analysts note the tax could accelerate cryptocurrency adoption as migrants seek alternative transfer methods. Services like Western Union already charge 5-10% fees, making the additional levy particularly burdensome. The move may inadvertently drive remittance flows toward blockchain solutions offering lower costs and faster settlement.

Latin American economies dependent on remittances face significant headwinds. The tax proposal arrives as crypto penetration in the region hits record levels, with Bitcoin and stablecoins becoming increasingly popular for cross-border transfers.