REGULATION | U.S. Proposes 5% Tax on Immigrant Money Transfers and How This Affects Crypto Remittances to Africa

The Washington Post and NBC News report that the bill specifically targets money sent to Latin America, Africa, and South Asia, regions that heavily depend on remittance inflows. Critics argue the move unfairly penalizes immigrant workers and disproportionately burdens low-income households that rely on overseas transfers to support families back home.

CryptoGuru··6 min read

As the U.S. moves to introduce a controversial new tax on remittances by non-citizens, the global remittance landscape could be on the verge of a dramatic shift – and cryptocurrency stands to benefit.

A newly proposed U.S. bill, titled “The One Big Beautiful Bill,” seeks to impose a 5% tax on remittances sent abroad by non-citizens, including green card holders and visa workers (such as those on H-1B or L-1 status). The measure is part of a broader Republican-led effort to raise funds for border security and immigration enforcement initiatives, echoing similar policy rhetoric from the Trump era.

This proposal could have an outsized impact on immigrant communities.

According to the Times of India, Indian immigrants in the U.S. remitted around $32 billion to India in FY 2023–24, nearly 28% of the country’s total inward remittances. A 5% levy would translate to over $1.6 billion in additional annual costs for this group alone.

The Washington Post and NBC News report that the bill specifically targets money sent to Latin America, Africa, and South Asia, regions that heavily depend on remittance inflows. Critics argue the move unfairly penalizes immigrant workers and disproportionately burdens low-income households that rely on overseas transfers to support families back home.


According to Central Bank of Nigeria (CBN) Governor, Olayemi Cardoso, between January and October 2024, Nigeria received $4.22 billion in remittances via international money transfer operators (IMTOS). According to other sources, the total remittances Nigeria receives can be as high as $20-$25 billion annually. These remittances are a vital source of income for many households in Nigeria. Specifically, the U.S is one of the top countries sending remittances to Nigeria. As reported by BitKE in early 2024, Nigeria accounted for 38% of the $54 billion remittance inflows into sub-Saharan Africa in 2023.


According to the Central Bank of Kenya (CBK), diaspora remittances to Kenya hit a record $4.94 billion ( KES 640.75 billion) in the year ended December 2024, marking 18 percent growth. Remittance inflows grew from $4.18 billion (KES 542.89 billion) in the previous year, with December 2024 marking a record high of $445.4 million (Sh57.1 billion) in monthly remittances. As reported by BitKE in early 2025, the United States contributed 51 percent of all remittances, highlighting its crucial role in Kenya’s foreign exchange earnings.

🪙 The Crypto Connection: Africa Leads the Way

While this legislative effort creates fresh friction for traditional remittance corridors, Africa is offering a glimpse into a different future – one powered by crypto.

According to recent updates from BitKE, African-based crypto platforms such as Pesabase and YellowCard are leveraging blockchain-based payment rails to offer low-cost, fast, and borderless money transfers, especially in countries like South Sudan. With remittance fees in sub-Saharan Africa traditionally among the highest globally (averaging 7.9% according to World Bank data), crypto provides a compelling alternative.

Moreover, peer-to-peer (P2P) crypto trading volume in Africa continues to grow, underscoring grassroots adoption. Countries such as Nigeria, Kenya, and Ghana have become regional crypto hubs, where digital currencies not only hedge against local currency instability but also facilitate efficient remittance flows.

🌍 A Decentralized Future for Cross-Border Transfers

The proposed U.S. tax on remittances illuminates the fragility and political exposure of traditional remittance systems. In contrast, crypto offers:

  • Decentralization: Free from government-imposed levies or banking intermediaries.

  • Lower fees: Significantly cheaper than legacy financial systems.

  • Borderless utility: Accessible to anyone with a smartphone and internet access.

For the African continent – and potentially for immigrant communities worldwide – cryptocurrency may be evolving from a speculative asset to an essential financial utility.

🚀 What Comes Next?

As policymakers debate the implications of taxing remittances, crypto developers and entrepreneurs are quietly building the infrastructure for the next wave of global finance.

The contrast is stark: while one system adds friction, the other removes it.


Stablecoin adoption is rapidly transforming Africa’s remittance landscape, offering a cost-effective and efficient alternative to traditional money transfer methods. As reported by BitKE, stablecoins now account for approximately 43% of all cryptocurrency transactions in Sub-Saharan Africa, driven by the need to circumvent high remittance fees and navigate currency volatility.

See also


Countries like Nigeria have emerged as leaders in this shift, with stablecoins facilitating cross-border payments and providing a hedge against the devaluation of local currencies.

In Kenya, an IMF-backed survey revealed that nearly half of private firms utilize stablecoins such as USDT to pay foreign suppliers, especially during periods of dollar shortages.


As reported by BitKE, Ethiopia has also experienced a 180% year-over-year growth in retail-sized stablecoin transfers, coinciding with the depreciation of its local currency.


These developments underscore the growing reliance on stablecoins to enhance financial resilience and streamline remittance processes across the continent.

For individuals and families dependent on remittance flows – especially in emerging markets – crypto is not just an alternative; it’s increasingly becoming a necessity.

 
 
 
 

Follow us on X for the latest posts and updates

Join and interact with our Telegram community

__________________________________________

__________________________________________

Related
All Rights Reserved - BitcoinKe.io
2020 © Zeen World News