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Crypto Adoption in Latin America: A Tool Against Economic Woes and Authoritarianism

by Blockchain NewsOctober 16, 2023

Latin America is carving a unique narrative in the global cryptocurrency landscape, with Venezuela and Argentina standing out due to their distinct socio-economic and political contexts. According to a report by Chainalysis, Latin America ranks seventh in the global crypto economy hierarchy, just ahead of Sub-Saharan Africa. The region’s preference for centralized exchanges (CEXs) over decentralized exchanges (DEXs) is notable, contrasting with global trends. However, the core attraction lies in how cryptocurrency is morphing into a tool against economic adversities in Argentina and a shield against authoritarianism in Venezuela.

Argentina: Crypto as Economic Safeguard

Argentina’s long-standing economic turmoil, accentuated by a 51.6% devaluation of the Argentine peso up till July 2023, has spurred crypto adoption as a defensive mechanism. In this period, the nation led Latin America in raw transaction volume, with an estimated $85.4 billion in value received, showcasing a strong grassroots adoption. Alfonso Martel Seward, Head of Compliance & AML at Argentina-based cryptocurrency exchange Lemon Cash, elucidates that crypto, particularly stablecoins, has become a vital alternative for savings amidst stringent foreign currency acquisition restrictions. This trend is visually evident in the spike of crypto purchasing as the peso devalued, especially around mid-April when Argentina’s inflation rate hit 100% for the first time in three decades.

Lemon Cash has capitalized on this situation, offering a debit card feature enabling users to transact with crypto at local retailers, thus alleviating day-to-day commerce challenges induced by currency instability. The rise of Lemon Cash, amid an active crypto market where about 5 million out of 45.8 million people use crypto, epitomizes the asset class’s capacity to buffer against economic hardships.

Venezuela: Crypto as a Pillar of Resistance

Venezuela’s narrative diverges from Argentina primarily due to its authoritarian governance under Nicolás Maduro. The nation’s economic woes, marked by hyperinflation rates surpassing 1 million percent, have driven many towards crypto, especially stablecoins, to preserve their savings. The crypto adoption trend in Venezuela also extends to enabling remittances, which have burgeoned due to a significant populace exodus since 2014.

A notable dimension is how crypto is fostering resistance against authoritarianism. Venezuelan opposition leader Leopoldo López shared an instance where crypto facilitated direct aid to healthcare workers during the Covid-19 crisis in 2020, bypassing the repressive governmental controls. This initiative, which benefited 65,000 medical professionals directly and impacted hundreds of thousands indirectly, underscores crypto’s potential as a humanitarian aid conduit amidst political repression.

Furthermore, López emphasized that cryptocurrency’s value in supporting democracy movements could be fully realized when the off-ramping process is independent of autocratic regimes, indicating a path towards leveraging crypto for broader societal change.

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Bitfinex Unveils Zero-Fee P2P Trading in Argentina, Colombia, Venezuela

by Blockchain NewsOctober 12, 2023

On October 11, 2023, Bitfinex, a leading digital asset trading platform, disclosed the initiation of a zero-fee trading facility for market takers on its Peer-to-Peer (P2P) platform in Argentina, Colombia, and Venezuela. This development follows the recent availability of the P2P trading service to clients within these geographies, further catalyzing the adoption of cryptocurrency trading in the region.

Bitfinex’s announcement underpins its commitment to fortifying the cryptocurrency trading ecosystem within these emerging markets. By abolishing the trading fees for market takers, individuals who execute buy or sell orders at prevailing market rates, the platform is propelling the advantage of real-time crypto-to-crypto settlements sans any financial encumbrances. This initiative is anticipated to spur trading activities by significantly reducing the cost of transactions, which traditionally acts as a barrier for many potential and existing cryptocurrency traders. The immediate financial relief is likely to enhance liquidity and foster a more robust trading environment on the Bitfinex P2P platform.

To avail of the zero-fee trading, users are required to log into their Bitfinex accounts and select the P2P option featured in the top navigation menu.

Established in 2012, Bitfinex has been at the forefront of digital token trading, extending a suite of advanced trading resources to both global traders and liquidity providers. The platform’s diverse offerings encompass peer-to-peer financing, an Over The Counter (OTC) market, and margin trading for a broad spectrum of digital tokens. With a strategic emphasis on delivering superior support, innovative tools, and a seamless trading experience, Bitfinex continues to garner a global clientele.

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Tagged : Argentina / Bitfinex / Colombia / CRYPTO-TO-CRYPTO SETTLEMENTS / MARKET TAKERS / News / P2P PLATFORM / Venezuela / ZERO-FEE TRADING

Argentina Approves First Regulated Bitcoin Futures Index

by Blockchain NewsApril 12, 2023

The National Commission of Value (CNV), the securities regulator of Argentina, has approved the country’s first regulated Bitcoin futures index to debut on the Matba Rofex exchange. The Bitcoin (BTC) futures contract will begin trading in May, making it the first regulated Bitcoin futures index in Latin America. The approval of the Bitcoin futures index is part of Argentina’s strategic innovation agenda, which aims to develop new and creative products in the capital market through public-private collaboration.

The Bitcoin futures contract will be based on the price of BTC provided by various entities in Argentina offering BTC/ARS trading pairs. All trades will be settled in the national fiat currency, and traders will be required to deposit Argentine pesos through bank transfer. To provide and use payment services in the country, an exchange must have a valid contract with a payment services provider registered with the Central Bank of the Argentine Republic.

The launch of the regulated Bitcoin futures index offers qualified investors a safe and regulated way to gain BTC exposure in a transparent environment. However, the CNV has also asked the Matba Rofex exchange to incorporate alerts that warn investors of the risks associated with such financial instruments. With the high inflation rate in Argentina, many citizens have turned to Bitcoin to mitigate its effects. The country’s peer-to-peer Bitcoin trading volume has also hit new highs as a result.

The approval of the Bitcoin futures index comes just a week after Binance announced its expansion to Argentina, indicating the growing interest in cryptocurrencies in the country. Argentina has taken a pro-crypto stance over the years, with crypto adoption nearly double its neighboring countries. The Ministry of Economy recently proposed a bill that encourages citizens to declare their crypto holdings and incentivizes them with tax benefits.

In conclusion, the approval of the Bitcoin futures index in Argentina provides a safe and regulated way for qualified investors to gain BTC exposure in a transparent environment. As the country struggles with high inflation, the launch of the Bitcoin futures contract comes as citizens turn to Bitcoin as a way to mitigate its effects. With a pro-crypto stance and growing interest in cryptocurrencies, Argentina is becoming a favorable destination for crypto-related businesses and investments.

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Tagged : Argentina / Bitcoin / FUTURES CONTRACT / Inflation / MATBA ROFEX EXCHANGE / News

Brazil and Argentina explore a common currency

by Blockchain NewsJanuary 23, 2023

The CEO of Coinbase, Brian Armstrong, suggested that Brazil and Argentina should switch to Bitcoin (BTC) as their national currency as Brazil and Argentina were beginning preparatory work for a potential common currency. This sparked a variety of discussions over the viability of Bitcoin (BTC) as a national currency. The Argentine peso and the Brazilian real will continue to be legal tender in both countries until a single currency can be established between them. The two nations in South America made the announcement on January 22 that they are beginning to plan for the creation of a joint currency.

The action may result in the formation of the world’s second-largest currency bloc.

Armstrong immediately rushed to Twitter when the news emerged to propose that Bitcoin would be the “perfect long-term bet” and to query whether or not the two governments would take it into consideration.

Raoul Pal, founder and current CEO of Global Macro Investor, was against the plan.

According to Pal, it is not optimal to have a national currency that “down 65% during the weak portion of the economic cycle and appreciates 10 times during the strong half of the cycle.”

The CEO pointed out that firms would have trouble preparing and hedging in this case because of the current climate. There were just a few others in the town who shared Pal’s opinion.

One person on Twitter claims that the only viable use for bitcoin is as a store of wealth, comparable to gold.

They posted the following on their Twitter account: Meanwhile, another Twitter user brought up the poor pace of transactions on the Bitcoin network and complained that they would take too long for everyday usage.

However, this was swiftly refuted by another community member who asserted that Bitcoin would become the “best means of trade” after the Lightning Network is completed. Armstrong’s statement may have been motivated by the fact that El Salvador, another Latin American nation, acknowledged bitcoin as a form of legal money in the year 2021.

The action resulted in several positive outcomes for the nation, one of which being an increase in tourism the next year, which totaled 1.1 million visitors to the nation.

In addition, El Salvador was able to use the revenues from its Bitcoin purchases to fund the construction of schools as well as a veterinary hospital.

Brazil and Argentina are no strangers to digital assets.

On November 29, the Chamber of Deputies in Brazil passed a bill that makes it possible to use cryptocurrencies as a form of payment in the nation.

Although the new legislation acknowledges cryptocurrency as a mode of payment, it does not make any particular cryptocurrency legal tender inside the nation.

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Tagged : Adoption / Argentina / Bitcoin / Bitcoin Community / Brazil / Community / News

Fintech Uala Rolls Out Crypto Trading in Argentina

by Blockchain NewsNovember 5, 2022

Uala, a fintech company based in Argentina, on Friday launched Bitcoin and Ether trading for its customers in the country.

Andres Rodriguez Ledermann, the Vice President of Wealth Management at Uala, said the new service at first will be rolled out to a few thousand customers. He, however, said the services will be available to all of the firm’s 4.5 million Argentine users in the coming weeks.

Rodriguez said while the company plans to launch the service in Mexico and Colombia where it also operates, regulatory matters need to be analyzed and addressed before such operations.

According to the report, Uala is the first market participant to roll out crypto trading in Argentina since the local central bank in May barred two banks from enabling its users to access crypto.

Rodriguez disclosed that in order for the firm to comply with current regulations in the country, Uala established a special company to offer its crypto service – Uanex, which is based in England and has the Latin American crypto firm Bitso as its crypto liquidity provider.

In early May, the Argentine central bank banned unregulated cryptocurrency transactions in traditional banks. The central bank instituted the ban, saying that digital assets are not regulated in the country.

The announcement came a few days after Argentina’s biggest private bank, Banco Galicia, and the largest 100% digital bank in Argentina, Brubank SAU, started offering digital assets trading services, including Bitcoin, Ether, and USDC stablecoin on their platforms.

The ban means local users had to use centralized crypto exchanges or trade directly through over-the-counter exchanges.

Argentina has been grappling with high inflation and the devaluation of its currency, the peso, for years. In March alone, the country’s monthly inflation rate rose to 6.7%, surpassing forecast data. As a result, locals have begun investing in cryptocurrency to protect their savings from shrinking purchasing power. Some employers also allow to pay up to 20% of an employee’s salary in cryptocurrencies.

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Tagged : Argentina / Crypto Trading / FINTECH COMPANY / News / UALA

Argentina Fighter Guido Cannetti Accepts Salary in Stablecoin

by Blockchain NewsSeptember 28, 2022

Argentina athlete Guido Cannetti of the world’s leading mixed martial arts competition Ultimate Fighting Championship (UFC) announced that he would would be paid in full in stablecoin USDC.

He becomes the first UFC athlete in Argentina to use a cryptocurrency stablecoin for salary.

According to Bitwage – the global leader in Bitcoin, cryptocurrency, and stablecoin payroll with services across invoicing and benefits services. Guido Cannetti will receive his USDC stablecoin payment via Stellar Network on Vibrant.

Stellar Network on Vibrant is a wallet application developed by the Stellar team specifically for Argentines experiencing inflation.

According to the official inflation data released by Argentina earlier, the inflation rate in August soared to 78.5% year-on-year, a new high in 30 years, and the month-on-month increase reached 7%. The inflation rate is expected to rise by nearly 95% by the end of this year.

The central bank has raised interest rates by a total of 3,700 basis points (37%) this year but has fallen into the dilemma of “no one dares to save money”.

Canneti said the stablecoin could hedge against local currency fluctuations and depreciation.

In a statement released by Bitwage, Canneti said that:

“I am getting paid in USDC because it is safer for my future.”

Due to persistent inflation, the devaluation continues to weaken the Argentine peso (ARS). Argentines are reportedly buying two to three times the normal amount of stablecoins.

Depending on different regulations, the adoption of cryptocurrencies is expected to continue to rise in Argentina, as cryptocurrencies are seen as a hedge against cyclical economic crises such as hyperinflation, recessions, and repeated currency devaluations.

51% of Argentinian consumers have purchased cryptocurrencies, with 27% of them buying cryptocurrencies on a regular basis, up from 12% at the end of 2021, according to Americas Market Intelligence’s April statistics.

Argentines have been seeking refuge in digital assets, even though the country has recently halted financial institutions’ crypto operations.

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Tagged : Argentina / Blockchain / Industry Expert / Stablecoin / Ufc / USDC

Bitso Rolls Out Crypto QR Payment Tool in Argentina

by Blockchain NewsSeptember 23, 2022

Bitso, Latin America’s leading crypto exchange, announced on Thursday that it is preparing to roll out a new QR code payment tool in its wallet app that will enable users in Argentina to pay with cryptocurrency at retail shops.

The new payment method is expected to give consumers an alternative to using the Argentine peso and will be beneficial in curbing the country’s inflation.

Beginning on September 27, members of the Bitso exchange in Argentina (estimated to be more than a million users in the country) will gradually be given access to the QR code option.

In a country where inflation is approaching 80% compared to last year, and the purchasing value of the peso is falling, the QR codes will give Argentina consumers another way to save money in crypto and spend it in actual stores.

Bitso’s Senior Vice President of Product Santiago Alvarado commented: “The idea is to make crypto more useful in more places and allow all citizens to live their lives in crypto by buying everyday services.”

The Bitso wallet software will be able to scan the QR codes in many stores in Argentina and give customers the choice of purchasing using Bitcoin, Ether, the Dai stablecoin, U.S.-dollar pegged stablecoins or Argentine Pesos. At the time of purchase, Bitso will automatically convert the merchant’s crypto into Argentine pesos.

Bitso’s wallet will be able to scan QR codes from “all other systems approved by the central bank,” Alvarado said.

Why the QR code surge in LATAM

QR codes are a popular payment method in Argentina – a nation that has the highest rate of QR code usage in Latin America, according to data from the Mastercard New Payments Index.

In a historically cash-based economy where a big chunk of the population remains unbanked (over 40% of Argentina residents are unbanked and in other related countries, including Colombia, Mexico, and Peru), digital payments are surging at a high rate in Latin America. QR code payments have surged in popularity, whose widespread use was significantly triggered by the covid-19 pandemic.

QR, which stands for “quick response”, — and codes can be encrypted with payment information to facilitate contactless digital purchasing. QR codes allow consumers to make payments simply by scanning the code with their smartphone camera, which then withdraws funds from their digital wallet.

Companies facilitating QR code payments in Latin America are emerging all across the region. In Argentina, companies such as Mercado Pago, TodoPago, ValePEI, Ualá, PIM, and Rapipago allow users to pay via QR codes from their digital wallets or accounts.

The Argentina Central Bank recently spurred the bandwagon, allowing several digital payment provider companies to offer QR code payments. This marks a huge step towards transforming the payment methods of a society that traditionally depends on cash.

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Tagged : Argentina / Bitso / CRYPTO QR PAYMENT METHOD / Industry / Latin America

Bitcoin Miner Bitfarms Starts Production in Argentina

by Blockchain NewsSeptember 20, 2022

Bitfarms Ltd, a Bitcoin mining company, headquartered in Quebec, Canada, announced on Monday that it has started mining production in its new facility based in Argentina.

The Canadian miner said its hashrate has exceeded the 4 exahash per second (EH/s) milestone as it began production at the first of its two 50-megawatt (MW) warehouses under development in Argentina. Bitfarms said the initial start-up adds 10 megawatts (MW) of power capacity to its portfolio, thus increasing total corporate capacity to 176 MW.

By deploying new facilities, the mining farm has begun the construction of its second 50 MW warehouse in Argentina, which is expected to be completed at the beginning of the second quarter of 2023.

Based on current foreign currency exchange rates and natural gas prices in Argentina, Bitfarms expects the energy cost at its newly operating 50 MW production facility in Rio Cuarto, Argentina, to be the lowest across the 10 sites in its portfolio.

Geoff Morphy, the President and COO of Bitfarms, talked about the development: “We are proud to start production ahead of plan at our first 50 MW warehouse in Rio Cuarto, marking our 10th mining facility and 4th country now in production. Executing our diversified global growth strategy to increase portfolio stability and reduce geographic and climatic risks, Argentina marks our fourth country in production.”

Currently, Bitfarms operations in Argentina hire 28 workers, which is expected to increase as production is added.

In October last year, Bitfarms signed contracts and started constructing a 210-megawatt farm in Argentina.

Why Argentina?

BTC miners consider Argentina a perfect environment for their production to thrive. Low/subsidized electricity and consumer bills to income ratio are some of the factors known to go in hand with such rapid growth.

Low energy costs mean the profit margin for miners is going to increase while electricity bills cost 3% maximum of households’ monthly income, far lower than regional neighbours. These make Argentina stand out more as an attractive target for crypto miners.

Argentina could become a crypto mining hub just like Texas. Bitcoin experts consider Texas as the world’s newest Bitcoin mining capital. The jurisdiction has been taking up China’s missed opportunity following China’s ban on crypto mining last year.

Since July last year, many Bitcoin miners found new ground in Texas and hailed that state as a new cryptocurrency hub.

To be profitable, mining cryptocurrency requires lots of cheap energy. China was once the main hub for mining because its electricity was relatively cheap. But that changed last summer when the local government imposed a shutdown on Bitcoin miners as the country heightened efforts to develop its own, better-controlled digital currency.

Since then, miners have been moving across the world, looking for places where electricity is cheap, and many have settled on Texas as their destination.

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Tagged : Argentina / Bitfarms / Mining / MINING FACILITY

Bitcoin Miner Bitfarms Starts Building First Warehouse in Argentina, Expected to Run in Q2 of 2023

by Blockchain NewsSeptember 20, 2022

Bitfarms Ltd, a Bitcoin mining company, headquartered in Quebec, Canada, announced on Monday that it has started mining production in its new facility based in Argentina.

By deploying new facilities, the mining farm has begun the construction of its second 50 MW warehouse in Argentina, which is expected to be completed at the beginning of the second quarter of 2023.

Currently, Bitfarms operations in Argentina hire 28 workers, which is expected to increase as production is added.

In October last year, Bitfarms signed contracts and started constructing a 210-megawatt farm in Argentina.

Why Argentina?

Since July last year, many Bitcoin miners found new ground in Texas and hailed that state as a new cryptocurrency hub.

Since then, miners have been moving across the world, looking for places where electricity is cheap, and many have settled on Texas as their destination.

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Tagged : Argentina / Bitfarms / Mining / MINING FACILITY

Argentina’s Mendoza Province Begins Accepting Tax Payments in Crypto

by Blockchain NewsAugust 30, 2022

Argentina’s province of Mendoza announced last week on Friday that it has enabled a system that allows residents to pay taxes using cryptocurrencies.

The system is part of a strategic move by the authorities of the province to modernize the payment of tax and state tributes, tariffs, and trade, thus giving residents many options to fulfil their obligations.

Nicolas Chávez, general director of the Mendoza tax administration authority, talked about the development: “It is one more door to facilitate the payment of taxes to taxpayers. This is a service offered by the payment processor with which we have incorporated new technology, such as virtual wallets and cryptocurrencies.”

Mendoza’s government stated that users will be able to pay taxes through the use of any crypto wallet such as Binance, Bitso, Buenbit, Bybit, Ripio, and Lemon.

According to the authorities, taxpayers can get a QR code and send the funds from their wallets.

An unidentified third-party firm will receive cryptocurrency payments, process and convert them into Argentinian pesos and send the funds to the province’s tax administration.

The system only receives payments in stablecoins, including USDT, USDC, and DAI, among others. In this way, the system maintains volatility out of its operations.

New Government Policies Accelerating Crypto Adoption

Other province and municipal governments in Argentina and major Latin American economies including Brazil, Panama, Panama, and The Bahamas, among others, have also announced plans to include cryptocurrencies as a means of payment for taxes.

In March, Rio de Janeiro, one of the largest cities in Brazil, disclosed plans to allow the payment of a municipal real estate tax with cryptocurrencies beginning in 2023.

In April, the country witnessed a lot of crypto-related changes. The capital city of Argentina, Buenos Aires, announced plans to allow the payment of taxes using cryptocurrencies. During that time, Horacio Larreta, the head of the government of Buenos Aires, said the use case could be implemented in 2023 together with a blockchain-based identification system.

In April, lawmakers in Panama’s National Assembly approved a law to regulate the use and commercialization of crypto assets in the Central American country and even to allow the payment of taxes with these assets in the country. The law also plans to allow the country’s governing bodies to receive payments for taxes, fees, and other tax obligations in crypto assets.

Also in April, The Bahamas government announced plans to allow citizens to pay taxes using digital assets beginning in 2026, according to a white paper that outlines the country’s digital asset strategy.

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Tagged : Argentina / Crypto / MENDOZA PROVINCE / News / Tax