Will the remittance tax on funds sent out of the United States prevent a full-scale escape of the US dollar?

The "The One, Big, Beautiful Bill" proposed by the Republican Party, also known as Trump's "Beautiful Law", suggests imposing a 5% remittance tax on non-U.S. citizens (including visa and green card holders) (exercise tax). Indian media Business Standard pointed out that India received a total of $32.9 billion in remittances in 2023-24, and if the tax law takes effect, Indian expatriates may need to pay an additional $1.6 billion in taxes each year.

What is "The One, Big, Beautiful Bill"?

The "The One, Big, Beautiful Bill" proposed by the Republican Party involves fiscal policies, including taxation, border security, defense spending, and energy policy. It is a budget reconciliation bill currently under consideration by the U.S. Congress, aimed at facilitating the swift passage of specific policies.

Is remittance subject to remittance tax?

The bill proposes a 5% transaction tax on international remittances made by non-U.S. citizens. The subjects of the tax are non-U.S. citizens, including holders of non-immigrant visas ( such as H-1B, L-1, F-1, etc. ), green card holders, and undocumented immigrants.

This clause will apply to all remittance transactions from the United States to overseas, with no minimum amount threshold, meaning even small transfers are subject to tax. It covers transfers made through banks and remittance services such as Western Union(, PayPal, and other platforms.

Taxes are deducted directly by the remittance service provider ) such as banks or wire transfer companies ( at the time of transfer and paid quarterly to the U.S. Department of the Treasury. If the service provider fails to withhold taxes at the time of transfer, they will also be liable for the tax obligations.

Who will be affected by remittance taxes?

If the bill is passed, it is expected to impose a tax on remittance transactions starting January 1, 2026, )exercise tax(. The affected parties include H-1B visa holders, green card holders, etc., especially individuals who support domestic family living, education, medical care, or investments ) such as real estate and securities(.

India is the world's largest remittance recipient, receiving about $32.9 billion in remittances from the United States in fiscal year 2023-2024, accounting for 27.7% of India's total remittances ($118.7 billion). If the tax law goes into effect, Indian expatriates could pay about $1.6 billion in additional taxes per year ) assuming the amount of remittances remains unchanged). Countries such as Mexico, China, and the Philippines are also major recipients of remittances, and migrants from these countries will also be affected.

Remittance taxes may reduce the flow of funds for immigrant families, affecting the receiving country's family support, savings, and investment capacity.

Experts warn that taxation may lead to the use of more illegal remittance channels or reduce the amount of remittances. Banks and wire transfer companies may lose fee income due to decreased transaction volumes.

Critics argue that the tax has a greater impact on low-income and middle-class immigrant families, as they typically send most of their income back home to support their families' livelihoods.

Is remittance tax favorable for cryptocurrencies?

For cryptocurrency users, the bill may prompt regulators to require more user information ( such as the recipient's location (, raising privacy concerns. If non-US citizens use cryptocurrency for international remittances, for example, transferring Bitcoin or stablecoins like USDT to overseas accounts through cryptocurrency exchanges or wallets, the transaction may be considered a "remittance transaction" and subject to a 5% remittance tax.

There may also be taxes through cryptocurrency exchanges.

Taxes apply to transactions conducted through a "qualified remittance transfer provider" )qualified remittance transfer provider(, which includes cryptocurrency exchanges regulated in the United States (such as Coinbase, Kraken) or platforms that offer cross-border transfer services. The bill requires remittance service providers to verify the sender's identity at the time of the transfer to determine whether they are U.S. citizens, which may compel cryptocurrency exchanges to strengthen KYC and collect more user information, such as citizenship, social security number )SSN(, or residency status.

P2P and DEX cannot be managed temporarily.

Peer-to-peer ) P2P ( transfers between individuals may temporarily avoid taxation, as these transactions do not necessarily go through regulated service providers. However, for platforms with higher anonymity, such as decentralized exchanges (DEX) ), regulators may also require compliance with similar regulations in the future, otherwise they may face fines or operational restrictions.

The case is currently still under review, and whether the bill passes or the details of its implementation will await further progress updates.

This article discusses whether remittance taxes will be imposed on capital flowing out of the United States to prevent a full-scale dollar exodus. It first appeared in Chain News ABMedia.