Mexican remittance tax could lead to Bitcoin boom - Axios

Mexican remittance tax could lead to Bitcoin boom

Greg Ruben / Axios

GOP Rep. Mike Rogers on Tuesday said that he will introduce legislation to charge a 2% tax on remittances from individuals to Mexico and other South American countries to help offset costs of President Trump's proposed border wall. It also could unintentionally spark mass adoption of Bitcoin and other cryptocurrencies, which could be used by immigrants to circumvent such rules.

What Rogers said: "It's my understanding that we have over $30 billion a year that are sent in remittances out of this country to South American countries, mostly to Mexico. I intend to introduce legislation entitled the Border Funding Act of 2017 that would put a 2% tax on those remittances, such as Western Union and MoneyGram remittances that would generate close to $1 billion a year."

White House reax: Sean Spicer declined to comment on Rogers' proposal during a press briefing, but his boss has previously indicated an interest in using remittances as leverage.

Why Bitcoin? Rogers specifically cited licensed money transfer companies, and his bill likely would extend to any other financial institution that handles actual currency, such as banks. But Bitcoin isn't legally-recognized currency. It's just code. That means Bitcoin-based money transfer companies like Abra are digital asset custodians rather than financial asset custodians (i.e., they never touch money), and are highly unlikely to be covered under such a bill.

"For starters, the idea of a remittance crackdown is absurd because people will just send money to Canada, which will then route it to Mexico," says a bitcoin entrepreneur. "But if they did somehow figure out how to stop remittances through financial institutions, it would be nearly impossible to write a rule that covers cryptocurrency transfers without also stopping things like American Express membership points and frequent flier miles. They're all just digital ledger entries."

Game theory: Even if the more regulated exchanges do get covered by legislation, immigrants could still conduct individual (and untraceable) transactions via cryptocurrencies. Just look at the recent uptick in Bitcoin volume in Venezuela, which is in the midst of a currency crisis:

Adapted from Coin Dance

It's also worth noting that Venezuelan authorities have tried to target Bitcoin "miners" via arrests and equipment confiscation, but there still seems to be plenty of local activity.

Isn't it too technical? Not really. A basic Google search can teach someone how to buy and sell Bitcoin, with or without a bank account. After all, if someone comes to the U.S. (legally or illegally) to send money back home, chances are they'll be eager to learn about a technology that lets them send money back home.

Bottom line: "Nobody wants to talk about it, but the number one use case for bitcoin (beyond speculation) is and will continue to be circumventing capital controls," says Ryan Selkis, managing director of CoinDesk. "If the cost of remittance shoots way up in any given corridor, Bitcoin will get more popular."


Bodies found after USS John S. McCain collision

Mass Communication Specialist 2nd Class Joshua Fulton / U.S. Navy photo via AP

Admiral Scott Swift, the commander of the U.S. Pacific Fleet, announced today that divers had found bodies inside the hull of the USS John S. McCain, which struck a civilian ship in the Strait of Malacca early yesterday, per CBS News.

The details: With 10 sailors missing after the collision, Swift didn't specify how many bodies had been found inside the ship. He also announced that the Malaysian Navy had apparently recovered another body.

Why it matters: The McCain incident adds to a string of deadly mishaps this year for the Pacific Fleet, undermining confidence in the United States' presence in the Pacific and spawning theories that the incidents might be caused by anything from gross mismanagement to cyberinterference.


Trump defends his Afghanistan flip-flop

Jim Lo Scalzo / AP

From President Trump's 25-minute address last night at Fort Myer in Arlington, Va.:

"My original instinct was to pull out — and, historically, I like following my instincts. But all my life I've heard that decisions are much different when you sit behind the desk in the Oval Office. In other words, when you're President of the United States. ...
[T]he consequences of a rapid exit are both predictable and unacceptable. ... We cannot repeat in Afghanistan the mistake our leaders made in Iraq. ...
When I became President, I was given a bad and very complex hand, but I fully knew what I was getting into: big and intricate problems. But, one way or another, these problems will be solved -- I'm a problem solver -- and, in the end, we will win."

A new way to chart ideological leanings in news media

Data: John Wihbey, Thalita Dias Coleman, Kenneth Joseph, and David Lazer. 2017. Exploring the Ideological Nature of Journalists' Social Networks on Twitter and Associations with News Story Content; Chart: Andrew Witherspoon / Axios

New data from Northeastern University shows a correlation between a journalist's social network and the content they produce. The data scientists that conducted the study found a reasonably clear relationship between the ideological leaning of the accounts a journalist follows on Twitter and the news content he or she produces.

Note: The methodology for determining ideological slant of journalists comes from the researchers at Northeastern, and is based on the articles journalists write. They first extracted phrases indicative of a left or right leaning ideology, and then they score journalists based on the number of times they express these terms in their articles. They discuss each of these pieces in more detail here.


Earth's continental plates reach at least 80 miles below the surface

NASA/Reid Wiseman (@astro_reid)

A new study published in Science has found continental plates reach 80-120 miles below the Earth's surface. As the Atlantic noted, that means "you're closer to the edge of space right now than you are to the bottom of a continental plate."

  • How they did it: By analyzing seismological data from Earth's continents, which the authors said "lines up well with the depth where diamonds are stable —an independent line of evidence for the depth of continents."
  • Why it matters: This information can help scientists understand how the plates move, and more precisely map out the composition of Earth's layers.
  • One remaining question: Whether the depth is a permanent feature of Earth or has changed over time.


Warning sign: Facebook teen-age use slips for first time ever

Facebook usage among 12 to 17-year-olds will decline for the first time this year, eMarketer estimates. Meanwhile, eMarketer's latest forecast for the first time has Snapchat beating both Instagram and Facebook in terms of total users aged 12 to 17 and 18 to 24.

Why it matters: This marks the first time eMarketer has ever predicted a decline in Facebook usage for any age group and usage among people 24 and younger will grow more slowly than previously forecast.

Data: eMarketer; Chart: Lazaro Gamio / Axios

  • "We see teens and tweens migrating to Snapchat and Instagram," says eMarketer forecasting analyst Oscar Orozco. "Both platforms have found success with this demographic since they are more aligned with how they communicate – using visual content."
  • "Outside of the Facebook-cutters, teens and tweens remaining on Facebook seem to be less engaged – logging in less frequently and spending less time on the platform. At the same time, we now have Facebook-nevers, many children aging into the tween demographic that appear to be overlooking Facebook altogether, yet still engaging with Facebook-owned Instagram."

Writing on the wall: Forbes headline from February: Facebook Users Posted A Third Less Content In 2016 Than In 2015.

Publishers take notice: BuzzFeed today Tuesday it will launch an all-new Snapchat Discover Publisher Stories for its Tasty and Nifty brands in early September. Both brands started as Facebook pages.


Lithuania challenges Russia with U.S. natural gas shipment

Lithuanian President Dalia Grybauskaite with U.S. soldiers east of Vilnius in July. (Mindaugas Kulbis / AP)

Lithuania, among the bravest of the former Soviet states surrounding prickly Russia, has poked a finger directly in the Kremlin's eye by buying a shipment of American liquefied natural gas, defying Moscow's energy stranglehold on the region. The shipment Monday could not have been economically advantageous, given that Russian gas supplies are right next door, but Lithuania calculated that the political dividends made it a shrewd deal.

Why it matters: The move suggests that, three years after the Russian invasion of Ukraine, the Baltic states remain resolved to putting up a strong front against Moscow.

  • A geopolitical move: In an interview with Reuters, Lithuanian Foreign Minister Linas Linkevicius explicitly described the LNG shipment as part of his country's political calculus. "We want to cement our relationship with the United States in many aspects in addition to defense and security, [and the] energy trade is one of the strategic areas for cooperation," he said.
  • The shipment comes almost exactly a month after NATO military exercises were held just east of the capital of Vilnius, also intended to convey as a message of resolve against Russia.
  • Savoring the moment: On Monday night, a map on showed the LNG tanker Clean Ocean still moored at the Lithuanian LNG port, just southwest of Banginis, suggesting no rush to stop aggravating Moscow.

Paul Ryan: tax reform "far easier" than health care

Screengrab via CNN

At a CNN town hall Monday night, Paul Ryan said, "I believe it's going to be far easier for us to do tax reform than it was for, say, health care reform."

Our thought bubble: His rationale was that Senate rules won't present the kind of roadblocks they did on health care, but there's a reason comprehensive tax reform has repeatedly stalled, as Ryan well knows. It's a huge lift.
  • On Charlottesville: "He messed up on Tuesday." Ryan was hesitant to condemn Trump's response as anything more than "morally ambiguous" until pressed by Jake Tapper.
  • On Trump's Afghanistan plan: "I'm pleased with the decision. I'm actually pleased with the way he went about making this decision."
  • On Trump's tweets: "Do I wish there would be a little less tweeting? Of course I do. But I don't think it's going to change."

Trump lays out plan to continue Afghanistan War

Carolyn Kaster / AP

President Trump gave a prime time, televised address from Fort Myer in Arlington, Virginia on the "path forward" for the War in Afghanistan. Trump, who once supported full withdrawal from Afghanistan, said the risks of a hasty exit were "unacceptable," and laid out the following policies:

  1. A shift "from a time-based approach to one based on conditions," so enemies don't "wait out" the U.S.
  2. Taking a harder line on Pakistan for providing safe havens to militants who target Americans.
  3. Reducing restrictions on troops, and "expanding authorities" to target terrorist networks and attack enemies.

Key takeaways

  • Trump said America can't be a force for peace in the world if it isn't itself at peace: "There can be no place for bigotry and no tolerance for hate" in the U.S, "love for America requires love for all of its people."
  • He didn't make specific reference to troop levels, though reports are that he'll be increasing the U.S. presence by about 4,000 troops.

His strategy

  • Trump said withdrawal "would create a vacuum that terrorists... would instantly fill just as happened before September 11." He said the U.S. can't repeat its mistakes in Iraq.
  • On his change of tune: "All my life I've heard that decisions are much different when you sit behind the desk of the Oval Office."
  • What victory looks like: crushing al-Qaeda, keeping Taliban in check, ensuring there's no base from which to attack the U.S.

"America First" elements

  • Trump says the U.S. has spent too much blood and treasure "trying to rebuild other countries in our own image."
  • Trump repeated his calls for allies to contribute more to their own defense, and said the greatest burden will fall on Afghanistan to protect itself, and "build their own nation."

CNN launches daily Snapchat show called "The Update"

AP Photo/Carlos Osorio

CNN is launching a daily news show for Snapchat called "The Update." The show will include breaking news segments and highlight big stories from CNN reporters and staff around the world. It will air daily at 6 p.m. ET.

Why it matters: Snapchat is making major investments in news content. Not only do outlets like The Wall Street Journal and Mashable have Snapchat Discover channels, major networks are taking to the platform to create shows exclusively for Snapchat. Snapchat has also invested in an editorial staff to produce their own news content, with news veterans like former CNN correspondent Peter Hamby.

Will it work? Signs point to success. Axios reported last week that NBC News' Snapchat show has been posting monster numbers (29 million unique viewers in less than a month.) CNN's current Snapchat Discover channel gets roughly 12 million monthly uniques.


Interior halts study on health risks of mountaintop coal mining

Jeff Gentner / AP

The Interior Department has ordered the National Academies of Sciences, Engineering, and Medicine to stop working on a study focused on the health risks of living near mountaintop coal mining sites in Central Appalachia. The National Academies made the announcement in a statement, and said it "believes this is an important study."

The reasoning: The department began reviewing grants and cooperative partnerships that exceeded $100,000 in April. Heather Swift, the press secretary for the Interior, told Axios that "The Trump Administration is dedicated to responsibly using taxpayer dollars and that includes the billions of dollars in grants that are doled out every year by the Department of the Interior."

The original request for the study came from the state of West Virginia in 2015.

This was updated to reflect the press secretary's statement.