Category Archives: Mexico

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Stablecoin Offers Way Out for Argentinians as Peso Struggles

Stablecoin Offers Way Out for Argentinians as Peso Struggles

After another economic crisis in Argentina, characterized by the peso’s falling to a record low against the US dollar, some financial analysts and commentators in the region see cryptocurrency as a potential solution.

After a history of inflation and debt defaults by the government, Argentina’s population see banks as a risk with some savers even keeping pesos in cash at home rather than deposit funds with a bank. Cryptocurrency has become more noticeable these days, particularly in the country’s capital Buenos Aires, where blockchain projects are thriving, unhindered by a government which is currently tolerant of the new technology.

It has been suggested that a cryptocurrency stablecoin may be a viable alternative to a struggling peso at some point if the current downturn in the economy kicks in with more vehemence. It could be that the mechanism already exists for creating a stablecoin with companies such as Ripio already adding its own to Dai coin to its exchange and wallet.

Developed by a foundation called MakerDAO, Dai is pegged to the dollar by using smart contracts on the Ethereum blockchain and is also currently being offered by another Argentinian exchange Beinbit. A few other exchanges in the region also offer Dai, the most notable of which is Buenbit. Ripio now has 300,000 users in Argentina, Brazil, and Mexico.

Nadia Alvarez MakerDAO’s business development associate for Latin America suggests that a change of perception by Argentinians needs to take place before a stablecoin could become an effective alternative to the national currency.

“One big problem that we have now is that all the crypto solutions have been for the crypto-nerds, for the techie people,” she said, adding that a stablecoin could offer the advantage of being “totally understandable” to users, rather than a cryptocurrency which fluctuates in value, as does country’s current fiat, the struggling peso.

 

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Brazilian Fintech Nubank Breaks into Mexico

Brazilian Fintech Nubank Breaks into Mexico

Reuters has reported that Brazilian fintech firm Nubank will now have an office in Mexico starting from this week as part of early steps into a potential expansion into other countries in the Latin American region.

Nubank made headlines after raising USD 400 million in investment rounds from big names in the fintech industry, including Tencent Holdings Ltd, Sequoia Capital, Tiger Global Management and Kaszek Ventures. Now into its sixth year, the Mexican branch of Nubank will start its operations with a staff of 20 people.

Co-founder Cristina Junqueira said in an interview also revealed that the bank will be using a simplified name: Nu. It plans to kick off by issuing credit cards to consumers after June, banking on the success of some 8.5 million customers already in Brazil, many of whom also hold credit cards.

Mexico represents an opportunity for fintech disruption in banking as many people there are still unbanked, as in they do not have bank accounts. However, a high penetration of internet and mobile phones have meant a ready userbase for phone apps.

Fintech VC Manolo Atala said the country was fertile for fintech growth, especially with low credit card use and no other competitor offering the same services.

Nubank was in the news recently as banks in Brazil are being investigated for denying services to the fintech firm.

 

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Coinbase Adds Latin America and Southeast Asia to Its Expanding Client Base

Coinbase Adds Latin America and Southeast Asia to Its Expanding Client Base

US cryptocurrency exchange giant Coinbase is to add 11 new markets in Latin America and Southeast Asia as part of its current global expansion programme.

This is hot on the trail of its expansion in the UK market seeing revenue growth of 20% to USD 173 million, and the recent announcement of its new Coinbase card. In 2018, the exchange recorded USD 520 million in revenue according to Reuter’s latest figures.

The Visa card, linked with the Coinbase Card app for iOS and Android, is only available to UK account holders, although there are plans to add support for other European countries in the future. The card will allow worldwide purchases where crypto payments are available online or in store.

Latin America has been in Coinbase’s sights for some time, so the access to trading services in Argentina, Mexico, Peru, Colombia, and Chile won’t come as a huge surprise to those in the region, given the company’s desire to spread its services to all corners of the globe.

Southeast Asia has a booming cryptocurrency market with Japan and South Korea leading the way, so a move towards capturing a piece of the market in the region is a sound move with India, Hong Kong, South Korea, Indonesia, the Philippines, and New Zealand customers now having access to Coinbase services.

With 53 countries now using Coinbase services including the recently added Andorra, Gibraltar, Guernsey, Isle of Man, Lithuania, and Iceland, the San Francisco-based company has thrown down the gauntlet to other major exchanges in its bid to become the globally dominant cryptocurrency exchange.

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Forbes: Trump Could Push Workers to Bitcoin

Forbes_ Trump Could Push Workers to Bitcoin

A Forbes article today has suggested that increasing pressure on immigration issues in the United States as the Trump administration prepares for a re-election campaign, could lead to more people, including residents in the USA, to consider Bitcoin as an alternative for sending money across borders.

Next year, President Trump will seek a second term as president of the world’s largest economy, and will be pulling out all the stops to ensure he rouses populist support, just as he did in his first election campaign.

Currently high on his agenda will be a remittance tax imposed on people living and working in the US illegally, sending money abroad. White House spokesman Hogan Gidley told the Associated Press that targeting remittances was a possibility.

“It is a top priority for the administration, as has been for two years, to reduce overstay rates for visas and the visa waiver program — and it’s well known that the administration is working to ensure faithful implementation of immigration welfare rules to protect American taxpayers.”

However, with many naturalized Americans as well as legally employed immigrants also sending money home to families living outside, it could be that they may opt to use a currency that is less monitored than traditional remittance. In which case, Bitcoin fits the bill.

In fact, over the last week, several South and Central American countries have already been reporting new highs in Bitcoin trading volume, according to Coin DanceBitcoinist also reported that Bitcoin trading volumes on peer-to-peer exchange platforms such as Localbitcoins, Paxful, and Bisq have shown a spike in countries like Mexico and Venezuela ever since the news of Trump’s remittance tax first surfaced. Mexico alone set a new record, with half a million dollars moving hands in the last week on Localbitcoins.

 

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Santander to Study Fintech Firms in Mexico

Santander to Study Fintech Firms in Mexico

One of the largest banks in Europe, Banco Santander, has announced that it will conduct a new study into financial technology (fintech) companies in Mexico, with the assistance of the Embassy of the United Kingdom in the country.

A blog post from TheStartupFounder detailed the announcement, which said that the study, to be developed by research firm Endeavor, would examine “the challenges, prospects and opportunities for the development of these companies”. The study would also come up with recommendations for them to continue the development and acceleration of competition on a level playing field for banks and fintech.

Announced at the Residence of the Ambassador of the United Kingdom to Mexico, the study also hopes to unearth new opportunities for public policy, acknowledging fintech innovations that benefit society in financial matters. As such, a “study on financial inclusion focused on women’s empowerment” and a panel on fintech investment would be coordinated as an inclusion vehicle.

Fintech development in Latin America is on the rise, with Mexico identified as the region’s second largest economies with a thriving fintech development and a large number of companies operating. An Inter-American Development Bank (IDB) study shows that Brazil leads the list of countries with more fintech companies in Latin America, with 380 operational ventures, followed by Mexico with 273.

What’s more, every third company in the region appears to have internationalized their activities, with IDB Chief of Connectivity Markets and Finance Division Juan Ketterer saying:

“Even though 86% of the fintech companies are located in only five countries, ventures have been found in every Latin American country as well as a strong proclivity towards internationalization, which demonstrates the opportunities perceived by entrepreneurs as well as the importance of further developing a regional harmonization and dialogue.”

 

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Bank Of Mexico Further Complicates Its Crypto Rules

Mexico’s Central Bank has published new crypto related rules which has left many industry players confused as to the ramifications of the new provisions.

The new rules which were published by the central bank in the federations official gazette before the weekend stated that the Bank of Mexico (Banxico) “stipulated that they wouldn’t authorize any cryptocurrency to be offered by regulated financial companies.”

The confusion lies in the fact that fintech law brought in 12 months ago simply requires exchanges to put in an application for an operating license. Toma Alvarez, CEO of Mexican exchange Volabit explains how that law operates:

“This law stipulates that services that hold custody of users’ fiat money or cryptocurrencies (most brokers and exchange business models require this) have to apply for a license issued by the Mexican equivalent of the SEC (CNBV).”

Alverez adds that the idea at the time was that the responsibility would be with the central bank to determine which cryptocurrencies were to be offered by the regulated companies and come up with a workable framework to facilitate this. The new ruling is in complete contradiction to this.

A catch-22 scenario now exists as a result because the law requires you to become a regulated financial institution (otherwise you would be operating illegally). However, once you obtain this license, you would not have the authorization to list cryptocurrencies, thereby making it legally impossible to operate an exchange in Mexico under the new law. The Central Bank explains:

“Institutions may only enter into transactions with virtual assets that correspond to internal transactions, subject to the prior authorization granted by the Bank of Mexico.” and adds, “They will not be eligible for obtaining the authorization” to directly provide their clients with cryptocurrency exchange, transmission or custody services.

Alvarez explained that exchanges are awaiting further clarification as to how this impasse might be overcome for current exchanges and comments:

“Fintech companies in Mexico are operating with a special waiver until the process for registration is ready thus allowing companies to register for the license. This will happen in around 6 months.”

However how useful this license will be when issued remains to be clarified. This is not the first punitive ruling affecting the industry after financial entities were required to identify customers involved in cryptocurrency trading late last year.

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North America: Crypto and Blockchain News Roundup 23-29 November 2018

North America

North America

Welcome to another weekly blockchain news roundup from around the world. Here we present to you all the latest Bitcoin news, continent by continent and country by country.

United States

Federal Reserve Bank Blames Bitcoin Futures Markets for BTC Price Decline: The Federal Reserve has officially blamed the launch of Bitcoin Futures Market for the recent decline in Bitcoin’s price according to a letter published on its website.

According to the online publication, Bitcoin Futures launch on December 17 last year converted the biggest bitcoin bull into a bearish situation. The Fed also goes on to make comparisons with falls in other assets’ prices after the launch of futures markets including the mortgage industry whose uptick was neutralised by the launch of mortgage securities. The dollar issuer then goes on to say that the Bitcoin could have kept rising past $20,000 if the futures had not been launched.

Federal Government Places Sanctions on Bitcoin Addresses: The United States has issued sanctions against several Bitcoin addresses as a first in the country. According to the government, the addresses were set up by two Iranians to help a ransomware scheme.

The sanctions were issued by the United States Treasury Department Office of Foreign Assets Control. People in the US and partnering entities are now banned from sending BTC to these addresses.

Lettuce Outbreak Results in FDA Seeking Blockchain Solution: A recent lettuce E. Coli break has resulted in the Food and Drug Administration (FDA) to seek a blockchain-based solution for food tracking in a supply chain. 

According to Dr. Scott Gottlieb in a CNBC interview, the FDA had requested that a food safety expert formerly of Walmart to act as a food and veterinary medicine supply commissioner. Dr. Gottlieb continued on and said that the new addition will help the administration to introduce new tools for tracking food, with blockchain being looked at as a viable solution.

Court Overturns Security Designation of ICO by SEC: In one of the first ruling of its kind, a judge of the Southern District of California has declared that the security classification by SEC on an ICO was not justified. 

ICO Blockvest had been walking a tightrope when it came to security designation from the SEC, but never explicitly broke the rules according to the judgment. While the decision is unique and first-of-its-kind, the ICO is still not exonerated as other charges remain on the project.

USD Tether Restarts Direct USD Redemption: USDT is slowly returning back to its best as the stablecoin company has announced that the direct redemption of the silverback is set to be re-enabled after months of issues that even affected the price of USDT against USD in the open market.

Tether currently is the top stablecoin in the market with over $1.8 billion market cap and it is ranked seventh on cryptocurrency market cap tables.

Mexico

Blockchain Association Formed With Consensys as First Member: The Central American country has seen the formation of the first blockchain association with ConsenSys starting the rostrum as the founding member.

According to Forbes Mexico, the new association has members who represent the fintech facet of the industry. Several local exchanges and hedge funds have found a seat on the table including Bitso, Volabit, Lvna Capital, etc in addition to ConsensSys.

Canada

Air Canada Partnering to Develop Blockchain Travel Solutions: Air Canada, the national flag carrier of the country is now partnering with a blockchain firm for developing a distribution system based on Blockchain technology.

Winding Tree, the partnering DLT company has created an open source blockchain marketplace where agents can arrange flights at their own commission rates.

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First Mexican Blockchain Association Established with ConsenSys as Founding Member

First Mexican Blockchain Association Established with ConsenSys as Founding Member

Mexico has established its first blockchain association comprised of world-leading and domestic industry leaders, with ConsenSys as a founding member.

Who’s in?

As reported by Forbes Mexico, the new association has members that for a majority represent the cryptocurrency and finance facet of the industry. For example, Bitso and Volabit are Mexican crypto exchanges, and there is also BIVA, Mexico’s second stock exchange, as well as Lvna Capital, a crypto hedge fund based in Mexico City.

Additionally, UK private equity firm Exponent and Mexican investment and brokerage firm Grupo Bursatil Mexicano (GBM) are a part of the founding members. Among them is industry titan ConsenSys, a leading blockchain incubator studio based in Switzerland who recently partnered with Amazon, and has Ethereum co-founder Joseph Lubin at the helm.

Intentions

Speaking with Forbes Mexico, provisional president Felipe Vellejo said, “This technology has the objective of creating more transparent, safe and efficient procedures”. Therefore, the association is seeking to improve public education on the topic in order to introduce such benefits to society; the Blockchain Association of Mexico will also endeavor to define the standards and practices required for the Mexican blockchain sector to thrive.

Reportedly, the members desire to see blockchain utilized properly and avoid nefarious abuse of the tech, such as money laundering. For the association, it is imperative that the standards set in place are efficient and safe for use, allowing blockchain technologies to operate with as little friction as possible.

Speaking on the potential of blockchain, Exponent Capital founder Mouses Cassab said, “The current applications of the blockchain range from decreasing the costs of sending remittances and international payments, to the democratization of the financial system.”

Purpose

Blockchain-related associations can be considered somewhat an ambivalent topic as they can either be seen as an unnecessary barrier of entry for enterprise networking and resources or viewed as an essential component for the forwarding of a pro-blockchain agenda domestically and on a global scale.

That said, the Mexican association is the first of its kind to represent blockchain in the country, likely making it an invaluable entity on the domestic industry frontier. Naturally, the association is open to any organization and entity that wishes to join due to the versatile applications of blockchain across all industries.

Mexico is gradually emerging in the global blockchain community; in April, a Mexican hackathon resulted in the government announcing the trial of a public procurement procedure on the blockchain some months later. Additionally, Mexico held its first-ever blockchain event in August, Viva la Crypto!.

 

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New Regulations in Mexico Restrict Banking Services for Crypto Investors

Mexico’s Central Bank, the Bank of Mexico, has updated regulations for financial entities that restrict the services they can provide to regular cryptocurrency investors.

Financial entities are first required to identify all the customers they have involved in cryptocurrency trading, and then sort out those operating on a regular or professional basis. Those that fall into this category must only be given demand deposit accounts and are required to provide additional identification data.

Banking service providers are told to refrain from opening new accounts to regular or professional traders, and any funds transferred to crypto beneficiaries are required to undergo additional validation checks. Each financial entity must provide accessible policies and procedures to prevent any illicit proceeds from being transferred to or from crypto-related accounts.

The regulations go as far as to prohibit banks from making resources available to crypto clients on the same banking business day that funds are deposited; should the Bank of Mexico issue any last minute notice that the bank should intensify the monitoring of the clients.

The central bank said that measures have been taken in order to prevent money laundering or illicit financial activities in Mexico. However, banks have raised concerns over how the new policies will be a detriment to market efficiency. Cryptocurrency exchanges have also expressed their views that the new know-your-customer (KYC) guidelines combined with the regulations will slow the speed of transactions and increase the cost for the process.

All authorized cryptocurrency exchanges must also comply with an additional set of guidelines issued by the Bank of Mexico, under the FinTech law that sets terms and conditions relating to the custody and control of digital currency assets.

Financial entities have until September 2019 when the regulations will be in effect, to comply with the new rules.

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Mexico Gets Its First Ever Blockchain Event: Viva La Crypto!

Mexico will be hosting its first ever blockchain event Viva la Crypto! this year on November 20 and 21 in Monterrey. The organizer, 25-year-old engineer Angelica Villarreal, hopes the event will be an opportunity for Mexico to become a globally recognized center for blockchain.

Speaking to Coin Rivet, Villarreal said that unfortunately many cryptocurrency investors and industry heavyweights fail to see the potential in Mexico. One of the difficulties she has found in organizing the event has been to even get recognition for the country as a place full of talent and potential. ”That’s another reason Viva la Crypto is so important” she said.

Villarreal has made a name for herself in the industry after just three years in the space, and now heads Horizen (formerly ZenCash) that operates across Latin America. As the lead organizers of Mexico’s first blockchain event, she hopes to bring together an inclusive crowd of 1,500 men and women to listen to the dozen or so prominent speakers.

The event has gained a large amount of media traction, she said, adding, ”We’ve had enormous interest from people, organizations as well as the media, which has led us to plan our next national campaign to promote this unique event further.” This will certainly be a significant opportunity for exposure to Mexican talents on the international stage.

Planning began in January when Villarreal jumped on the opportunity to create a blockchain-focused event in her local city, with Mexico City being the target for 2019.

Speakers at the event

Among the list of prominent speakers at the event are:

Arnaud Saint Paul: As the founder an director of Give.si, Paul is recognized as a socially conscious blockchain expert and philanthropist. He will give a lecture on blockchain and its social Impact.

Alexandra Levin: She holds a position as the Chief Diversity Officer at the Wall Street Blockchain Alliance. With a background in global finance, her speech will be dedicated to international regulation in blockchain and cryptocurrencies:

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