In an effort to diversify its catalogue of business offerings, Coinbase is now offering cross-border payments to Mexico. Let’s take a look at what this new service is all about
The Coinbase platform has announced in a blog post a new cross-border payment feature to Mexico. Wishing to diversify its range of offers, the American company thus intends to take market share from the famous MoneyGram, Wise or Western Union.
Thus, Mexican emigrants and expatriates can already experiment with this new solution to send cryptocurrencies to their relatives via their Coinbase application. Users have two options. They can keep the funds on their app to grow, or they can generate a code to withdraw the money in cash at 37,000 withdrawal points across Mexico.
This new feature is a great example of the ability of cryptocurrencies to provide access to finance for unbanked populations. This is one of the value-adding verticals of the blockchain, which was highlighted by Staci Warden, the new CEO of the Algorand Foundation.
Coinbase is expanding into the global payments business by launching a cryptocurrency remittance pilot program in Mexico, allowing U.S. customers to send cryptocurrencies to recipients in Mexico, who can immediately cash out their crypto holdings in their local currency. pic.twitter.com/RpmzC3orCs
– Satochi Nakamodo (@s_nakamodo) February 16, 2022
Coinbase opens up new opportunities
In a global market that was worth $700 billion in 2020, Coinbase aims to stand out from the competition through lower fees. Brian Armstrong’s company claims that cross-border payment services can charge up to 6-7% in fees, where this new service will be 25-50% cheaper.
Until 31 March 2022, beneficiaries will be able to take advantage of this offer for free.
The offer also includes stablecoins such as the USDC. This allows you to avoid exposure to the volatility of the crypto market, but also to protect yourself against a possible instability of the local currency. For, it should be kept in mind that for some countries, inflation is reaching such proportions that cryptocurrencies like Bitcoin (BTC) are considered more stable than the state currency. This is particularly the case in Cuba.
Coinbase aims to eventually expand its solution beyond Mexico to cover countries with similar issues.
Interestingly, this is not the first time the NASDAQ-listed company has expanded its service offering. Last month, it announced the acquisition of FairX with the aim of tackling the derivatives market.
Furthermore, the company has plans for metavers and decentralised finance (DeFi). It is therefore a diversification strategy that could prove relevant when we know that its revenues collapsed in the second half of 2021.
Extract from Coinbase’s income statement (Source: Investing.com)
