Cryptocurrency Em Conversa South America

Em Conversa: New Cryptocurrency Use Cases With Bitso

Em Conversa looks to uncover the secrets in Latin America (LatAm) that have caused the fintech market to boom, from being worth less than $50million in 2016, to $2.1billion in 2022. This week we spoke to Daniel Vogel, CEO and co-founder of Bitso, to understand how cryptocurrency is evolving across the LatAm region. 

In July 2022, Bitso and the São Paulo Football Club (SPFC), collaborated for the signing of midfielder Giuliano Galoppo from Argentine Club Atlético Banfield, to be made using cryptocurrencies. The transaction was made on the Bitso platform, which made the payment possible and marked the first transfer of contracting Tricolor using cryptocurrencies as a means of payment. 

We spoke to Vogel to understand how far along LatAm is in its crypto usage when compared to the rest of the world:

Can you tell me about the company and your role within it? 
Daniel Vogel, CEO and co-founder of Bitso
Daniel Vogel, CEO and co-founder of Bitso

Founded in 2014 by myself, Ben Peters, Pablo Gonzalez, Bitso was created to harness cryptocurrency’s ability to increase financial inclusion across Latin America.

About half of the Latin American population has no access to basic banking services, so many have turned to investing in crypto—the barrier to entry for cryptocurrency in many Latin American countries is often lower than traditional forms of financial management. Bitso was founded to solve this problem and put crypto into the hands of people in regions where it has the most impact. Bitso began in Mexico, and has since expanded to offer services in Brazil, Colombia, Argentina, and El Salvador.

As the leading cryptocurrency platform in Latin America with over five million users, Bitso’s core mission is making crypto useful in everyday life. Bitso is one of the few crypto exchanges, and the only one in Latin America, to obtain an International distributed ledger technology (DLT) license.

As the co-founder and CEO of Bitso, my role is to manage operations and strategise solutions that best harness crypto’s ability to transform the economy of Latin America. A friend introduced me to Bitcoin while I was working at Quantcast, and I immediately dove into researching the revolutionary technology.

My passion for cryptocurrency began then, and I went on to create the Harvard Business School Bitcoin Club and immediately upon graduation started Bitso. Access to Bitcoin in Mexico at the time was impossible, and given the potential Bitcoin and crypto more generally have to provide financial tools to individuals traditionally excluded from the financial narrative, this was an opportunity to create positive change in Latin America.

What are some digital/fintech trends being seen in LatAm? How are these trends helping the unbanked and underserved populace of the region?

Cross-border payments and remittances are among the most prominent fintech trends throughout Latin America. Remittances are a critical source of income for families in the region, especially during the pandemic.

Remittances made up 2.4 per cent of Latin America and the Caribbean’s GDP in 2020 and increased 24 per cent in 2021, reaching $135billion. Since the start of the pandemic, cryptocurrency adoption from both institutional and retail players has drastically increased across Latin America. Given crypto’s lower costs and faster transaction time compared to traditional financial institutions, it is an immensely helpful solution for individuals transacting with family members in other countries.

Another prominent trend emerging in the space as a direct result of cryptocurrency innovations is yield staking. Allowing individuals to easily invest in high-yield returns creates new forms of passive income, requiring less liquid investment upfront (which is a massive barrier, as many do not have the funds for major investments) with high rates of return. Understanding the opportunity that staking provides individuals throughout Latin America led us to create Bitso+, allowing users to stake stablecoins for high yields.

What has crypto adoption been like in LatAm in the last three years?

Cryptocurrency adoption in Latin America has accelerated over the past three years. Mastercard’s survey, published in June 2022, found that 51 per cent of consumers in the region have already transacted with crypto. Chainalysis2021 Geography of Cryptocurrency report listed four Latin American countries among the top 20 global adoption leaders.

The same study found that the region is responsible for about nine per cent of the global value received in digital assets. These illustrate the region’s excitement about cryptocurrency and blockchain technology – which extends far beyond peer-to-peer payments and speculative investing.

Many use cases beyond payments have emerged throughout the region, and Bitso is committed to continuing the development and adoption of these offerings. As mentioned early, through Bitso+, we offer yield staking. Our partnership with debt fund Addem Capital created the first use case for decentralised funding, providing entrepreneurs with cryptocurrency to fund their projects.

The sports industry in particular has allowed for many innovative use cases of crypto, from paying for the transfer of players to allowing crypto payments for tickets to matches.

What could ensure crypto’s success in LatAm?

Crypto leaders can ensure success throughout the region by working with regulators, security companies, and customer support teams to develop platforms and projects that are in good regulatory standing, safe, and properly address the needs of their users.

To best harness the power of blockchain and cryptocurrency, it is crucial for individuals to have access to education about the technologies. People are naturally more hesitant to use technologies they do not understand, so to ensure crypto’s success in LatAm companies and institutions must offer resources that explain the technology and how it can benefit the lives of users.

Educational institutions such as Coderhouse are leading this effort, and crypto projects offering support and information through blogs, multimedia content, and in their customer support efforts is another important step.

As roughly half of the Latin American population lack access to traditional financial tools, the accessibility of cryptocurrency tools through mobile devices and computers will drive increased adoption. As education is further implemented and more of the population understands the technology, adoption will flourish at an accelerated rate.

Have sports and crypto meshed in the same way in LatAm as they have across the rest of the world?

Compared to other countries use of crypto in sports leagues, Latin America is leading the way when it comes to integrating crypto as an option for sports fans. At Bitso, we are always looking for new ways of making crypto useful and offering new and better services to our users. We started our journey into sports by announcing our sponsorship of Tigres in Mexico and have since supported both Tigres Femenil and São Paulo FC in paying for play transfers via crypto.

Most recently, we partnered with the Mexican Football Federation to offer 100 limited-edition jerseys, each of which came with a corresponding NFT jersey that owners’ Decentraland avatars can wear to support the Mexico National Team in the metaverse. With millions of users across Latin America using crypto in their daily lives, the sports industry offers innovative use cases for cryptocurrencies and promotes widespread crypto adoption through creative channels.

Having seen Bitso’s Colombia expansion earlier this year, how does the Colombian fintech/crypto market vary to that of Brazil, Argentina and Mexico?

Colombia is a global leader in driving cryptocurrency adoption, with over 3.1 million residents owning cryptocurrency. The government of Colombia is continually working to drive innovation to improve its processes and the lives of its residents. By working with the government to expand our services, initially through a limited sandbox program and later to all residents, we’ve seen a prominent desire among Colombians to integrate technology into their everyday lives.

Since launching our full services in Colombia last month, we quickly exceeded 5 million users globally. As the first crypto-powered remittance service in the country, there was a large gap that we filled to provide individuals with cheaper, more accessible, and faster cross-border payments.

What does Bitso’s growth plan and road map look like? 

Through strategic partnerships and collaborations with government agencies, businesses, cultural entities like sports teams and educational platforms, Bitso is continually growing and enriching its global community and product ecosystem. Over the next few months, we will continue to promote global cryptocurrency adoption by providing individuals with new, innovative ways to make crypto useful in their everyday lives.

We are excited to launch our Bitso Card in the coming months, with a waitlist of 90,000 users.

Author

  • Francis is a journalist and our lead LatAm correspondent, with a BA in Classical Civilization, he has a specialist interest in North and South America.

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