Bloomberg Línea — Bloomberg Línea presents the personalities and institutions that made a mark in the Latin American cryptocurrency market in the second half of 2021.
In the face of global and regional concerns about freedom, inflation, and the concentration of large databases in corporations, investment in cryptocurrencies has taken off, and even more so during the Covid-19 pandemic. More recently, in the context of Russia’s invasion of Ukraine, ordinary citizens have turned to these assets to safeguard the value of their savings in the face of the collapse of traditional currencies.
Read More: These Are the Crypto Leaders in Latin America in the First Half of 2021
The uses are increasingly diverse and adoption in Latin America is accelerating. According to Chainanalysis, a think tank focused on crypto issues, Latin America received 9% of the total amount of cryptocurrencies shipped in the world between July and June 2021. This amount, equivalent to $353 billion, has not only attracted the attention of regulators and tax agencies, but also of companies from various industries, which are seeking to join the crypto wave.
Read More: Tax Authorities Wake Up to LatAm’s Increasing Crypto Adoption
Cipriano López González, vice president of innovation and sustainability at Bancolombia (COLOMBIA)
In December 2021, Bancolombia (BCOLO) became one of the first banks in Latin America to announce an official alliance with a crypto exchange, Gemini, to begin a pilot program for the purchase and sale of cryptocurrencies, within the framework of the regulatory sandbox promoted by the Financial Superintendency of Colombia, the country’s financial sector regulator. Also participating in this testing period promoted by the regulator are Davivienda in alliance with Binance, Banco de Bogotá with Bitso and Buda, and Movii with Panda and Bitpoint, among other entities. Cipriano López Gonzlález, one of the executives leading Bancolombia’s incursion into the crypto world, is confident that the legalization of Bitcoin as legal tender will happen “sooner rather than later”.
Bloomberg Línea: How far are we in the region from seeing the mass use and legalization of crypto as a form of payment?
Cipriano López González: The events of the previous year in El Salvador, followed by the political initiatives in Panama and Paraguay, show us that cryptocurrencies as a means of payment and even as legal tender will become increasingly common in our region. Within the technological trends of blockchain technology for 2022, this topic is one of the most transcendent and feasible. Finally, we are seeing more and more businesses accepting cryptocurrencies as a means of payment in Colombia and the region, although they are not regulated, they are gaining strength because they become an everyday habit for people.
Will we see more Latin American countries following in the footsteps of El Salvador in terms of legalizing Bitcoin as legal tender?
It is something that will happen eventually, sooner rather than later. This development, leaving aside the political issues and concentrating on the economic issues, demonstrates that some cryptocurrencies have a stronger economic thesis than the national circulation currencies of some of the Latin American countries and, therefore, it will be much easier for people to make the decision to migrate to this medium as an asset and even pressure their governments to do so.
What is your price prediction for BTC (XBT) in 2030?
I don’t like speculation and even less see BTC as an investment product, I see it more as a way of storing value over time.
Regionally, do regulation and taxation today represent more of a threat or an opportunity for the crypto industry?
I believe that a balance must be found between taxation and regulation for crypto companies. Today we are working hand-in-hand with the Colombian regulator in a sandbox to explore this technology, products and help define clear guidelines for the country. I see it as an opportunity for healthy competition and for traditional companies to compete under equal conditions in such a changing world. From the regulatory point of view, I see it as a threat due to the slow pace that we have seen in the countries of the region to understand and take a clear position regarding crypto companies and crypto assets. This is reflected in gray areas, in fear when doing business and informality that ultimately do not benefit the end user, and create environments with competitive disadvantages for both parties.
Read More: Why Bitcoin Is Losing Its Shine in El Salvador
Marcelo Cavazzoli, CEO and co-founder, Lemon (ARGENTINA)
In November 2021, Lemon became the first crypto company in Argentina to launch a prepaid card that allows users to pay directly from their balances in stablecoins (USDT and DAI) they have in the application. That differential, which saves customers the need to sell their cryptocurrencies to pesos before transacting, led to a boom in downloads, with 100,000 cards issued as of February 2022. In February, Lemon expanded the functionality of its VISA card to allow payments from bitcoin and ether (XET) balances. In addition, each transaction has the benefit of a 2% cashback in the same cryptocurrency. Marcelo Cavazzoli, who co-founded Lemon in 2019 and established a crypto payments ecosystem first in the Patagonian town of San Martín de los Andrés, now plans to consolidate the company nationwide.
Bloomberg Línea: How far are we in the region from seeing the mass use and legalization of crypto as a form of payment?
Marcelo Cavazzoli: Large institutions, banking entities, artists, global brands such as Tesla, MicroStrategy, Adidas, Snoop Dog and even countries like El Salvador have already opened the doors to the world of cryptocurrencies and blockchain technology to a large number of investors and new users. This shows that adoption is imminent. Argentina has already surpassed one million users who own crypto assets and there are already more than 220 million in the world, where we can catalyze a positive long-term scenario for the industry and the adoption of blockchain technology. At Lemon, we entered into an alliance with VISA with the aim of providing a concrete use for cryptocurrencies within the traditional financial ecosystem by launching our flagship product: LemonCard, a contactless card that allows you to debit in real time both in pesos and cryptocurrencies that you have in our app and receive 2% of the total purchase in Bitcoin. Today, it is already possible to use cryptocurrencies to buy from dog food to video games or services on all digital platforms.
Will we see more Latin American countries following in the footsteps of El Salvador in terms of legalizing Bitcoin as legal tender?
The Latin American context leads to the benefits of cryptocurrencies to improve people’s lives. That is why the region was the one that was the most introduced into this market. As a result of this, we have seen that there are some advanced projects in different countries, it is a matter of time to see how they evolve. In addition, the fact that the case of El Salvador is a Spanish-speaking country highlights the potential of this market, especially in Latin American countries.
What is your price prediction for BTC in 2030?
It is impossible to know what price it may have in the future, but I am sure it may be higher than many imagine. Having Bitcoin today is like having a little piece of the future. If we zoom out and take perspective, Bitcoin has already become a store of value and many experts call it the new digital gold.
Regionally, do regulation and taxation today represent more of a threat or an opportunity for the crypto industry?
All over the world, projects or laws are advancing to frame operations within a regulatory framework that provides clear rules, and our region is no exception. We hope that regulation will bring more security to users and allow us to have clear and predictable rules in all cryptocurrency operations. At Lemon we are part of the Argentine Chamber of Fintech, and we work collaboratively on regulatory projects. Crypto fintechs must be consulted and taken into account when considering regulation, because it is the future of an economy that is constantly evolving. For our part, we comply with all current regulations and offer maximum security to our users so that they can operate within the app, always seeking to bring all the benefits of blockchain technology to our users in a simple and safe way.
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José Guadiana, COO, Moneta (MEXICO)
With the exception of a nine-month period from February 2020, the Mexican peso has remained at around 20 pesos to the U.S. dollar over the past five years. That stability - it was the Latin American currency that depreciated the least against the dollar in 2021 - was one of the factors that led José Guadiana to promote the creation of Moneta last year. It is a stablecoin pegged to the value of the Mexican peso, which aims to eliminate the need for Mexican crypto investors to have to be doing so many conversions, and which allows them to think in their own currency. It also seeks to reduce international remittance costs.
Bloomberg Línea: How far are we in the region from seeing the mass use and legalization of crypto as a form of payment?
Jose Guadiana: We are just coming out of a startup stage and as more institutions and governments begin to join the space, we are starting to see exponential growth in mainstream users using crypto as their method of payment for everyday things. This has already been seen in several countries in the region. This momentum comes with difficulties as businesses, intermediaries and users are trying to navigate the complicated compliance and tax elements of crypto to currency conversions. However, we believe this is a necessary phase in taking cryptocurrencies to the next level of mass adoption.
Will we see more Latin American countries following in El Salvador’s footsteps in terms of legalizing Bitcoin as legal tender?
In our opinion, the question is when it will happen and not if it will. Prior to El Salvador’s decision, the government of The Bahamas had already launched the SAND Dollar as part of its CBDC planning. Puerto Rico, which although part of U.S. territory, has been in favor of inviting crypto-related businesses to register. Other Latin American countries could follow suit or may have already done so. Bitcoin as legal tender is a great way for developing countries to reach the top of the highly competitive financial world; it will help their economy not only by attracting business and tourism, but also by easing the tight control that the United States has over them, as the U.S. dollar is still of great support to these countries in their stages of economic instability.
What is your price prediction for BTC in 2030?
Bitcoin will have an upward trend, but with respective ups and downs. We had correctly predicted that Bitcoin would reach $50,000 three years ago, and now we predict that Bitcoin will reach $500,000 in the next five years, and is on its way to $1 million by 2030.
Regionally, do regulation and taxation today represent more of a threat or an opportunity for the crypto industry?
I wouldn’t say that regulations and taxes are a threat to the crypto space. I think the current ones still do not respond to the real needs of it, or at least need to adapt to it. So, there are a lot of inconsistencies, and some factors that could be seen as a threat. The opportunity here is for regulators to see cryptocurrencies not as a ‘weirdo’ in the financial system, but to fully embrace the concept, as no country can eliminate Bitcoin or cryptocurrencies in general. Crypto is the future of our financial system, and we cannot ignore the facts. As they say, if you can’t beat ‘em, join ‘em. Crypto is the future, and the opportunity is here for us to seize it as we know it.
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Helena Margarido, head of crypto assets and partner, Monett Investimentos (BRAZIL)
Helena Margarido started to get involved in the crypto assets market in Brazil 10 years ago, and today she defines herself as an ‘evangelist’, investor and researcher of the sector. She also leads the crypto area at Monett Investimentos, an investment platform that operates in Latin America’s largest economy.
Bloomberg Línea: How far are we in the region from seeing the mass use and legalization of crypto as a form of payment?
Helena Margarido: Today some technologies are being proposed to solve cryptocurrency payment problems, both from the point of view of the mass adoption of operations and the cost per operation within the blockchain. Cryptocurrency payment integrators are expanding the range of cryptos they accept as payment. It is not specific to Bitcoin. And merchants has the option to have zero exposure to cryptocurrencies if they so choose. So those technologies that bet on speed and low transaction cost are the ones that are going to stand out. It’s like going through the machine and validating the transaction. Nobody wants to spend 10 minutes waiting to validate a block on the Bitcoin blockchain. Solana Pay was launched recently. The Solana network is one that proposes to be an incredibly cheap and fast Ethereum. There are other cryptocurrencies that are already on Lightning Network [a decentralized network that allows instant payments between participants through smart contracts]. Even Litecoin itself. There are even others that I do not recommend using as an investment, but as a transaction currency I see no problem, such as Dogecoin. Why not?
Will we see more Latin American countries following in the footsteps of El Salvador in terms of legalizing bitcoin as legal tender?
To me, paying for something with Bitcoin is almost like someone paying for something with a gold bar. Can you do it? You can. But is it the best way to make a payment? No. El Salvador did two very important things. It made Bitcoin legal tender and invested part of its treasury in Bitcoin. There are already several other countries taking this second step. I find it difficult to see other countries following in El Salvador’s footsteps. Not for lack of relevance or because governments do not recognize Bitcoin as a good store of value, but because there are alternatives to central bank digital currencies, CBDC. China’s government has already announced for years what it is doing, and the Fed has launched a public consultation. Why would a country give up its sovereign currency for something that is universal? Why would you give up power for free? In the short to medium term, I think these CBDCs are the way to go. In the future it will be inevitable, everything will be paid for with crypto.
What is your price prediction for BTC in 2030?
One million dollars, no exaggeration. It is an unparalleled store of value. It doesn’t have a utilitarian criteria like Ethereum does. I can’t tell you if Bitcoin will be the biggest cryptocurrency on the market. Just as gold does not have the largest market capitalization in the world today, but it is the quintessential store of value. By 2030, 99% of all bitcoins that will be issued between now and 2140 will have already been issued. Scarcity will increase too much. Even a million dollars per bitcoin may fall short.
Regionally, do regulation and taxation today represent more of a threat or an opportunity for the crypto industry?
From the moment you regulate an activity, you impose a series of restrictions and limits for someone to engage in that activity. In this case, we are talking about a whole market, where you have from exchanges to people buying and selling. Then there is a need to do KYC (know your customer), verify that there is no money laundering, the origin of the resources, because there is already macro legislation that deals with that. The big question is that there are many big investors looking to invest in cryptocurrencies. Why not invest yet? Because there is no specific regulation that says how you can do that. In Brazil, for example, we are governed by the principle of legality, which, in short, expresses that whatever the law does not prohibit is allowed. But even so, institutions do not feel respected in their fiduciary duty to take the necessary precautions to invest money safely if there is no clear legislation. It is inevitable that for a market to grow steadily, specific rules applicable to the industry are needed. Otherwise, you won’t see much money coming in.
Read More: Brazil’s Senate Takes First Step Toward Regulating Crypto
João Canhadas, CEO and founder, Foxbit (BRAZIL)
João Canhadas founded Foxbit, one of the largest crypto exchanges in Brazil, in 2014. In eight years of existence, the company has brokered transactions worth a total of 22 billion reais ($4.3 billion), with more than half of that amount, or 12 billion reais ($2.35 billion) occurring last year alone. In February, Foxbit received a $20 million injection from OK Group, a global giant in the crypto world. The Brazilian firm’s new partner’s stake will be a minority one.
Bloomberg Linea: How far are we in the region from seeing the mass use and legalization of crypto as a form of payment?
João Canhadas: Specifically as a means of payment, Bitcoin is evolving a lot through the second layers (the so-called level 2). I think Bitcoin will be that, but it also needs technological evolution and security. It is not ready yet. Another point is that some things are generational. This generation is now learning to use the QR code as a means of payment on a daily basis, the PIX [Brazil’s electronic payment system] has helped Brazilians a lot. It is a natural step to start understanding cryptocurrencies. PIX contributes to this user’s learning in a completely digital operation. The Central Bank has already discussed the evolution of PIX to something 100% digital, to become a de facto cryptocurrency. It is a path of no return. It’s generational. My dad may not deeply understand Bitcoin and that’s fine. I understand. My daughter will understand more than I do. For her, all-digital payment will be even more natural. For them, a world of cryptocurrencies will become more and more natural.
Will we see more Latin American countries following in El Salvador’s footsteps in terms of legalizing Bitcoin as legal tender?
For a country that has a monopoly on the currency, this step is very difficult. In the case of El Salvador, which already used the U.S. dollar as currency, it was less difficult to make this decision. In the case of a country like Brazil, which has a monopoly on the real and the currency, this gives a lot of power to the state. It is very difficult for this to happen in a country like ours.
What is your price prediction for BTC in 2030?
Being conservative, it will be more than double what it is today - Bitcoin at $100,000? I’m being extremely conservative. Being conservative, you will double your purchasing power. Never doubt the historical ability of politicians to destroy the value of their economies. An immediate example is the ruble in Russia. An authoritarian politician destroyed the value of Russian savings in a matter of days. At the very least it is reasonable to think that exposure to 1% Bitcoin in any portfolio is not investment, it is defense. Today, the question is not about Bitcoin, it’s about everyone - do you think politicians will be able to maintain their purchasing power in the coming years? If the answer is no, you should already own Bitcoin.
Regionally, do regulation and taxation today represent more of a threat or an opportunity for the crypto industry?
It depends on how this regulation emerges and what rules are inserted. And depending on how this regulation emerges, it could be a great opportunity. The institutional market in Brazil is anxiously awaiting regulatory clarity so it can spend resources on cryptocurrencies. It is just unsure due to the lack of clarity, of how to go about it. The guy who manages a pension fund can even buy as an individual, but not as a legal entity.
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Leonardo Galindez, CEO and founder, CoinCoinX (VENEZUELA)
CoinCoinX is the crypto asset exchange that has managed to become one of the leaders in Venezuela. The company, which has around 10,000 users and aims to reach 100,000 by 2022, holds $1.5 million in reinvested capital, while concentrating among its users an amount of approximately $5 million. Galindez, 34, not only created this exchange, but also promoted the use of Bitcoin in Venezuela for foreign trade purposes, for example, for payments to Chinese suppliers.
How far are we in the region from seeing the mass use and legalization of crypto as a form of payment?
Leonardo Galindez: If we are talking about commercial use, we are very far away. Venezuela is one of the few case studies in the world where you can say that you can pay in crypto for food for the household, buy gas or rent a yacht. On the other hand, to say that there is adoption of crypto for other purposes is very different because that is something that has been happening all over the world. Mass use already exists. There are millions of people daily buying and selling crypto assets for billions of dollars and much of that activity occurs in the region. The legalization of crypto as a payment method is another thing. At the moment it is not illegal. I think the legal or regulatory issue will be more aimed at the profits you can get from trading in the cryptocurrency market.
Will we see more Latin American countries following in the footsteps of El Salvador in terms of legalizing Bitcoin as legal tender?
It is important to highlight the case of Venezuela. Let’s not forget that it was the first country in the region to create a law that regulates not only Bitcoin, but all cryptocurrencies in their broadest definition. Each one with a vision, I believe for different historical moments, and with its particular characteristics. That is why to say that another country will legalize Bitcoin as a form of payment specifically is something very difficult to predict. Particularly, I would like to think that Brazil and Argentina, which are the two big markets in the continent in crypto, may take that step this year and pleasantly surprise us.
What is your price prediction for BTC in 2030?
I really don’t know. It’s very difficult to predict this year. I just hope it’s not the year we pay back all the giveaway money that all the central banks decided to print during the pandemic. If so, we may see the hypothesis that Bitcoin is digital gold proven.
Regionally, do regulation and taxation today represent more of a threat or an opportunity for the crypto industry?
Absolutely and, without a doubt, it is an opportunity. I am a true believer in decentralization and the freedom that cryptocurrencies give us. On the other hand, creating an industry in a country must always have rules that allow for protecting the user, as well as the investor. At the end of the day, a symbiosis is created because if the entrepreneur creates a fintech company that complies with all the technological, legal, tax and reserve capital regulations, the ecosystem that is created is healthy and durable, allowing all participants to trust they are able to use it without the need to resort to services abroad.
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María Pía Aqueveque Jabbaz, representative for Hispano-America of the Blockchain Research Institute, CEO of Maqueveq & Co (CHILE)
María Pía Aqueveque Jabbaz is an economist with studies in public policy, financial markets and financial innovation. She is a strategic and financial advisor to fintech companies that implement projects with digital assets, and she seeks to foster the development of the decentralized financial ecosystem throughout the region. Through her company, Maqueveq & Co. she represents the Blockchain Research Institute, founded by Don and Alex Tapscott, in Latin America and Spain. In this role, she has met with former presidents such as Sebastián Piñera of Chile and Mauricio Macri of Argentina. She was the manager of an agreement for the creation of a Blockchain Center of Excellence in Argentina, as part of a global network, and she currently leads the team that is advising El Salvador in a consulting role to support its implementation of its Bitcoin law.
How far are we in the region from seeing the mass use and legalization of crypto as a form of payment?
María Pía Aqueveque Jabbaz: In Latin America, the process will take place in sub-regions. On the one hand, Central American countries and eventually Mexico, one of the countries with the largest number of crypto holders along with Argentina, will adopt legalization as a payment method more quickly. On the other hand, in Andean and Southern Cone countries, legalization will be slower. As far as Bitcoin is concerned, more than a means of payment, I see it as a complementary monetary system. Particularly for dollarized economies, since they do not have monetary policy control, and they have greater challenges and fewer maneuvering instruments.
Will we see more Latin American countries following in El Salvador’s footsteps in terms of legalizing Bitcoin as legal tender?
It is likely that some countries such as Honduras and Guatemala will decide to take the step of making Bitcoin a legal tender, once the development of the fintech ecosystem, foreign direct investment and other short- and medium-term benefits start to become more evident in El Salvador, which will not be long in coming, between now and next year. El Salvador will also be an interesting case from a monetary point of view. It will be possible to observe the dynamics of these two systems in a challenging year for the U.S. dollar, considering the outlook for the United States and the imminent economic slowdown. Dollarized countries such as Ecuador and Panama would be natural candidates to legalize Bitcoin as legal tender.
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What is your price prediction for BTC in 2030?
I do not make price predictions over that timeframe, as it is determined not only by long-term demand, but also by a conjuncture of economic and geopolitical events. I do dare to make adoption predictions, which is much more important. In the short term, we will see more companies accepting Bitcoin for the purchase of goods and services. By 2030, beyond the case of bonds backed by this cryptocurrency, I think that by that date most economies will be backing at least part of their reserves in ‘digital gold’.
Regionally, do regulation and taxes represent more of a threat or an opportunity for the crypto industry today?
The crypto industry has never been risk averse, but on the contrary, so it is an opportunity to launch and test disruptive business models with controlled investment levels. However, when they want to scale and make higher levels of investment, having regulatory certainty facilitates the raising and cost of capital. The biggest challenge is for regulatory and fiscal institutions to adapt and respond to the multi-functionality and layering of crypto-issuing applications. Otherwise, they will hinder the potential and opportunity we have today to create organizations that allow the application of transparent and efficient models.
Methodology: The personalities and companies featured in this biannual list were selected according to the editorial criteria of the editors of Bloomberg Linea in Latin America. This criterion consists mainly of the selection of local players that have stood out in their country during the period, either through innovation or growth of the company or organization to which they belong, or through their own positioning as a reference in the crypto space, among other factors.
Jimena Tolama and Maolis Castro contributed to this report. Translated from the Spanish by Adam Critchley