Cryptocurrency has changed the way some companies do business. It offers a fast, inexpensive way to send payments, especially overseas, and some cryptocurrencies also offer access to and use of specific decentralized apps. Mexico has a relatively high adoption of cryptocurrency, although reports suggest that this is primarily due to its use for remittance payments. And, while there are some BTC ATMs and businesses that accept cryptocurrency, the number isn’t that high, yet.
Bitcoin launched in 2009 and was the first cryptocurrency, but, today, there are several thousand coins. Cryptocurrencies can be used as a transfer of value thanks to their speed and low cost, and this is what Bitcoin was primarily established for. However, other currencies are used for other purposes. Ethereum is the second-largest cryptocurrency network and is widely used for the establishment of decentralized apps. It is popularly used by developers to build meme coins. And the second largest cryptocurrency is even used to play new and innovative games like Ethereum dice because of its secure, anonymous system.
Digital currencies are being used in a wide array of industries. As well as the finance industry, users can find cryptocurrency, and the blockchain technology that underpins it, in healthcare, real estate, fine art, gaming, and gambling, along with many other industries.
Although it certainly hasn’t overtaken fiat currencies in its use, its adoption has increased significantly since the early days of Bitcoin in 2009 and it continues to gain prominence globally. According to one study by Chainalysis, Mexico has the 14th highest adoption rate of countries around the world and performs especially well in its uptake in retail.
Cryptocurrency is popular with some retail companies, especially those that offer their products online because it offers cross-border payments that complete in a fraction of the time and at a fraction of the cost of traditional payments. Some of the fastest blockchain networks can finalize transactions in a matter of seconds and for a few cents, at most.
There are also payment gateways and other technologies that can be implemented on ecommerce websites to help reduce pain points and friction for businesses. Using some payment gateways it is possible to accept cryptocurrency without ever having to handle or hold Bitcoin.
These low-cost, virtually instant overseas payments have also made cryptocurrency a popular option for remittances. Remittances are payments sent from overseas to family back home. This is one area where cryptocurrency is especially popular in Mexico. In 2022 alone, more than $55 billion of remittances were sent from the US to Mexico, and in 2023, Bitso, a popular crypto exchange, processed $8 billion in remittances with more than half being between the two countries.
Bitso is the biggest cryptocurrency exchange in Mexico and it offers most pairings available at other exchanges. It also enables users to buy into cryptocurrency using the Peso. Other popular exchanges include the likes of Binance and Coinbase, which are two of the largest exchanges in the world.
Regulations differ around the world, with many governments and securities agencies still debating how digital currencies like Bitcoin should be treated. In Mexico, it is treated as a digital asset. There are no rules prohibiting its use in exchange for goods and services, but it is not considered legal tender and is not considered a foreign or alternative currency, at least in the eyes of the government.
This is similar to the way most countries currently deal with cryptocurrency. Only a handful of countries accept cryptocurrency as legal tender. El Salvador was one of the first. It is possible that more countries, presumably starting with those with developing economies, will accept the likes of Bitcoin as legal tender, but its uptake in this area has been slow.
Another reason for cryptocurrency’s popularity is that it offers a secure payment method. Crypto uses advanced cryptography to encrypt payments. To facilitate this, every entry on the digital ledger uses private and public keys. While public keys are used for sending payments, private keys are retained by the holder and never shared.
This makes cryptocurrency payments more secure than fiat currency payments, which can be intercepted and hacked. It also means that, unless a third party gains access to your private key, which can be stored physically or on a device that is not connected to the Internet, they cannot gain access to a person’s crypto holding.
Blockchain is the digital ledger that cryptocurrency is built on. It is essentially a digital ledger. Every record added to the ledger is immutable, so it can’t be changed. While it is commonly used for cryptocurrency payments, blockchain can be used for any kind of transaction. It has been used to create Non-Fungible Tokens, or NFTs, with the Mexican National football team signing a deal with Mobile Streams plc in 2022 to launch an official collection of national football collectible tokens.
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