Puebla, Mexico-based digital currency exchange Bitso has launched a Ripple gateway for the peso to allow remittance capabilities to its customers.
Bitso‘s establishment as an entry point into Ripple’s peer-to-peer network means that its customers will be able to more easily transfer pesos, US dollars and BTC across borders.
The company’s co-founder and CTO Ben Peters said:
“We are committed to developing the infrastructure required to revolutionize the incumbent remittance ecosystem in Mexico, harnessing the transformative innovations of cryptocurrency.”
Since Mexico is the third largest receiver of remittances after India and China, unlocking the market for low-cost bitcoin remittances has long been a goal for digital currency initiatives.
A number of US states have large Mexican migrant populations that send cash back home. Yet, the ability to send money from the US to Mexico is not easy, despite the proximity.
Billions of US dollars are sent from the US to Mexico, and the fees to transmit this money can be prohibitively high. The World Bank reports that the average cost to send $200 USD to Mexico using an operator service such as MoneyGram is 4.45%.
According to BitcoinAverage, Bitso holds 50% of volume for the MXN/BTX trading pair. Its chief competition in the market for exchanging peso for bitcoin is LocalBitcoins, which has similar volume.
Bitso and Ripple
Ripple is a currency-agnostic method of moving money. An offshoot of bitcoin’s decentralized network, it is able to move both fiat and digital currencies. There is no fee for gateways like Bitso to use the Ripple protocol.
Rather, Bitso will be required to comply with regulatory requirements and service customers converting currencies into pesos.
This is where Bitso will make its money – by charging a small fee to exchange money via the gateway. If Bitso can charge less than banks or money service operators and make its service easily accessible – possibly with the use of bitcoin ATMs – it could become competitive in the remittance market.
The news also shows that interest for Ripple is translating internationally.
Most recently, Fidor became the first bank to use the Ripple payment protocol in what could be a sign of more announcements to come.
Peso image via Shutterstock