What is the Future of Crypto in South America and the Caribbean?
By all indicators, South America and the Caribbean will continue to be one of the fastest-adoption-rate regions in the world for FinTech companies, at least through 2020. Meeting the needs traditional banks haven’t is the underlying credo of the emerging FinTech industry.
Historically, Latin America (LATAM) and the Caribbean have been underserved by the global financial community. More than half of residents in the region are “unbanked” but nearly all have access to a smart-phone or connected computer.
Area FinTech companies have topped over 1,000 in count, making competition stiff, while incubators in the region are fueling growth. As always, it’s a balance between innovation and regulation. Some countries are getting behind digital asset-backed economics while others are dragging their feet.
A Brief Look at LATAM and Caribbean Crypto by Country
Argentina hasn’t ruled out cryptocurrencies and it’s citizens are among the highest volume in users. The government has recognized the value of blockchain for delivering government services more efficiently and effectively called, Blockchain Federal Argentina.
In Barbados, the Prime Minister Mia Mottley, stepped in to quash a row between Bitt and the country’s central bank. Her plan? Roll-out the coin as a twin to the Barbadian dollar.
Bermuda is a frontrunner with its recent Digital Asset Legislation, embracing cryptocurrencies while attempting to design risk out of the equation, maintaining the country’s status as a leading financial haven.
Bolivia’s central bank banned crypto in 2014 but private banks have been toying with including blockchain in the technology stack supporting their services, especially smart-contracts.
While Brazil hasn’t made any official declarations about cryptocurrencies, private industry has taken off there and the largest exchange in the country Foxbit is constantly trying to best Mexico’s number one exchange, Bitso. Recent reports show more than 1.4 million users of crypto in Brazil.
Cuba is a closed-book. The internet and banking are all government controlled. Could be a late-bloomer but at this point it’s impossible to tell.
Cayman Islands remains capitalism-friendly with fewer requirements than Bermuda, even. No need for approval from the finance minister and extraordinarily simple corporate registration and tax filing requirements.
Chile’s currently drafting legislation that they intend will put them in front of what they’re calling the Fourth Industrial Revolution; even the Ministry of Energy has started using Ethereum to monitor and improve energy use in the country. Expect big moves here in 2019/20.
Guatemala and Honduras have discouraged the use of cryptocurrencies but haven’t banned them and many residents use them to receive money from family overseas. El Salvador also discourages them, hasn’t banned them, but has outlawed ICO’s for the time being.
Other countries where the government and central bank haven’t officially weighed in but people are using crypto at tourist spots include the Dominican Republic, Peru, and Costa Rica.
Ecuador had a similar experience to Venezuela in that, after banning cryptocurrencies in 2014, they launched a state-sponsored digital currency to discourage people using banned coins, however that currency has only reflected a shadow of a sliver of the economy’s actual liquidity (0.002%).
Mexico recently passed the “Ley fintech” law which requires transactions clear with the country’s central bank according to their guidelines, and focuses on crypto enterprises, with an emphasis on crowdfunding, crypto assets, and APIs, making it one of the friendlier crypto-environments of the region.
Because of low energy prices, crypto-mining has taken root in Paraguay, in fact, several Brazilian mining operations have relocated there. The government hasn’t approved cryptocurrency per se, it has a hardline stance on anti-money laundering, it has recognized the potential benefits.
Uruguay is currently developing legislation for crypto assets and blockchain based companies.
And who hasn’t heard about Venezuela’s effort to climb out of (US sanction-induced) debt by issuing their own digital coin, the Petro, in August of this year.
What about… Suriname, French Guiana, and all the other countries? Citizens have access to exchanges but it is painfully challenging to use them.
Demand is high!
Current exchanges are racing to keep pace. Every week there is an announcement of one exchange expanding into new languages and services while others fold, quietly exiting the arena.
Countless people will tell you that South America and the Caribbean is the perfect region for the emergence of quality FinTech services. And they’re right.
The landscape updates constantly making it difficult to keep up on the latest headlines. This useful map, prepared and maintained by the Blockchain Policy Initiative, is probably the best way to stay current on global legislation by region.
If you’d like to learn more about the future of FinTech in LATAM and the Caribbean, check out this telegram channel. If you have a question or comment, hit me up. I’m in.
