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I see some problems with this. Okay, moving bitcoin is effortless* and almost free. That part works great, but what happens at each end?

Exchanging between bitcoin and local currency is somewhat difficult and incurs fees. In fact, in the US one of the key reasons it is difficult is that government is naturally trying to close off this potential loophole, because that's what organizations of this nature do -- really this brings us back to the issues of control that are raised by the original link.

It would be interesting if this kind of increasing pressure on financial gateways led immigrants to start demanding payment in bitcoin, but there's no sign of that happening yet. They need to be familiar with it first.

Immigrants have an extremely limited selection of places to spend bitcoin in their home countries. Though if the demand existed, then the market would grow. Ironically, the most developed bitcoin economies are the US and Europe. In the US, there is a pretty wide selection of goods available, thanks to big retailers like Overstock and Newegg, but even there, one is still limited to a small subset of stores.

* edit: I should add that, with the current state of the software, it's not the safest way for an average person to handle large amounts of money. Obviously, there's lots of potential for improvement there.

Three years ago, smartphones were rare in Mexico. I had to go to a specialty dealer who unlocked AT&T iPhones to get mine.

This year, I've been shopping for phones again in Mexico. Every network and every shop is full of nothing but smartphones. Almost all monthly plans come with data. Accessory shops with cases and covers and headphones and stuff exist in every town.

Mexico's bitcoin infrastructure is ready to take over the money transfer business if the government and the banks make it hard or expensive to go through official channels. All it will take is enough expense to make it worth learning to use bitcoin. The network of small entrepreneurs that would do the actual cash exchange already exists: Mexico is a land of small shops and informal businesses.

Erecting arbitrary barriers is more likely than ever to create a black market.

Money transfers internationally incurs fees too. And if the US banks close the opportunity to do it at all, that incurs an even higher cost for people who need to support their family for example (forcing them to e.g. take trips to hand over cash).

It's not going to happen overnight, but if USD transfers gets too expensive and difficult, it's a natural outlet. And I'm sure illegal money transfer services will spring up to (have a pile of drug money in Mexico and want to move it into the US without the complexity of moving the cash? Sell money transfer from the US to Mexico)

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