How to send money to family abroad in crypto
When sending money to family in crypto makes sense
A stablecoin transfer travels over a network, meaning the shared system where transfers are recorded, with no chain of intermediary banks. In return, it adds two steps that a bank transfer does not have: buying the stablecoin on your side and selling it on your relative's side. So the method fits when three conditions are met:
- your relative has a smartphone and is willing to learn a wallet once;
- in their country crypto can be legally sold for local money, and there is a platform that works with their bank or with cash ⚖️;
- the whole route comes out cheaper or more convenient than a transfer through a bank or a money transfer service on your route.
How do you compare a crypto transfer with a bank transfer?
Add up every cost along the crypto route and compare the total with what your relative would receive from a bank transfer of the same sum. There are three costs: the fee and exchange rate when you buy the stablecoin, the network fee for the transfer, and the fee and the rate your relative gets when selling.
For a bank or a transfer service, look at the final amount in the recipient's currency after the exchange rate, because one advertised fee is not enough for a comparison.
The World Bank collects what banks and transfer services charge on your route, as a percentage of the amount1.
Under the UN target, a transfer counts as cheap when it costs less than 3% of the amount1.
What the sender does
- Buy the stablecoin. Where and how to do it for the first time is covered in the guide how to buy crypto.
- Ask your relative for their wallet address, that is, the number of the "account" where crypto arrives, and for the name of the network. If the address came by messaging app, confirm it by voice or in a video call, since a messaging account can be hacked.
- Send a small test transfer and wait until your relative says they can see it in the wallet. The guide how to send USDT explains how to choose the network and check whether a memo is needed (an extra recipient number that some exchanges ask for).
- Send the rest and give your relative the transaction hash, meaning the transfer's number on the network, so they can check the arrival themselves.
- Keep the date, the amount and the transaction hash. You will need them if a bank or an exchange asks where the money came from or what the transfer was for ⚖️.
What the recipient does
Your relative needs a wallet on their phone or an exchange account in their country. In their own wallet the money is in their hands, and access is usually restored with a seed phrase, a set of 12 or 24 words (what is a seed phrase). There may be no other way, and then a lost phrase means lost money. An exchange account is simpler for selling, though the exchange controls the crypto there. Choosing and setting up a wallet is explained in how to store crypto.
After that, the choice is your relative's: keep the stablecoin in the wallet, or sell it on an exchange or through P2P (directly to another person on a platform that holds the crypto until the payment arrives) and withdraw the money to a card, an account or as cash. The guide how to sell and cash out crypto walks through the steps. On P2P, the crypto is released only when the money has come from a person with the same name as the buyer, because money from a stranger may turn out to be stolen.
What if the recipient does not know how to use a crypto wallet?
Go through their part of the route with them once, on a small amount, ideally in a video call. They install the wallet, write the seed phrase down on paper, show you the address, receive the test transfer and find it in the history. Then agree on three rules:
- the seed phrase is never told to anyone or typed into websites, and neither "support" nor you have any right to ask for it;
- before acting on any request to send money or any "wallet problem", they first call you on a familiar number;
- anyone who tells them to withdraw cash and put it into a crypto ATM is a scammer.
The last rule matters for older relatives. In the US in the first half of 2024, people over 60 were more than three times as likely as younger people to report losses through crypto ATMs, and honest companies and government agencies never ask for payment through such a machine2.
If a wallet is still too hard for your relative, a money transfer service that delivers the money to a cash desk or an account itself may be the more reliable choice.
How can a relative get cash without a bank account?
Without a bank account, there are two ways to sell a stablecoin for cash, if they are available where the recipient lives: at a licensed exchange office, or through a P2P platform that allows cash payment at a meeting ⚖️. The deal is opened on the platform, because a hand-to-hand deal outside the platform has none of its protection. The meeting is set in a busy place, it starts with a small amount, and the crypto is sent only after the cash has been counted. Which methods are legal and available in a given country is shown on that country's page and in the local exchange's help pages.
Risks of sending money to family and how to reduce them
Scammers write or call in the name of a relative who is supposedly in trouble and demand payment at once, often specifically in crypto3. They count on you sending the money before you have time to think. Before you send anything, call your relative back yourself, even if the voice on the line sounds like theirs. The article phishing and scams covers other schemes.
A stablecoin's price usually stays close to a dollar, yet sometimes it moves noticeably away from it (what is a depeg). The company that issues a stablecoin (the issuer) can also freeze tokens at a specific address, and then they cannot be moved. On 8 August 2022, for example, Circle froze USDC at addresses on the US sanctions list4. The profiles USDT and USDC explain how this works for each token.
The networks a stablecoin is issued on sometimes change, so before the first transfer your relative checks that their wallet or exchange accepts the chosen stablecoin on exactly that network.
Rules in the sender's and the recipient's countries
A transfer involves two countries at once, and each has its own rules ⚖️. Before the first transfer, check in the official sources of both countries:
- whether crypto can be legally bought, sent and sold;
- whether there are limits on transfers abroad and a duty to report them;
- whether the recipient's country taxes the transfer as a gift or as income, and whether a sale triggers tax;
- which exchanges and swap services operate legally in the recipient's country.
What is known about individual countries is collected on the pages cryptocurrency in Argentina, cryptocurrency in Brazil and cryptocurrency in Kazakhstan. The guide how to handle crypto taxes covers the general approach to taxes.
