On the latest installment of Block Stars, David Schwartz, CTO of Ripple, speaks with Daniel Vogel, CEO and co-founder of Bitso, Mexico’s leading crypto exchange.
Due to the economic uncertainty and volatile Mexican currency, many Mexicans use US dollars to protect their wealth. This is extremely difficult for a third of the 125 million unbanked people in the country, which explains why Mexico is one of the fastest growing crypto markets in the world today.
“The great power of crypto is the democratization of access,” says Daniel. “[In Mexico] If you don’t have a certain amount of money to make then this is just not of interest to you [traditional] Financial institutions. Crypto solves this problem. “
Although consumers and businesses want to store long-term value in US dollars, their daily expenses still require Mexican pesos. Bitso leverages Ripple’s On-Demand Liquidity (ODL) service to ensure customers can switch money between currencies quickly and cheaply.
“We want to make sure that people can get on and off crypto … seamlessly on our rails,” explains Daniel. “On-Demand Liquidity is a service that enables fiat currency conversion using crypto technology. In our case, we support the conversion of US dollars to Mexico pesos, where the digital asset XRP is a bridge currency. We process almost 10% of transfers from the US to Mexico through ODL. “
With more than one million users and an accelerating rate of growth over the past year, Bitso is Latin America’s leading crypto exchange today. However, it hasn’t always been easy for the company Daniel co-founded in 2014, especially given the regulatory uncertainty in Mexico for most of those years.
“It has been a long way for us to navigate the regulatory landscape in Mexico,” he recalls. “We’ve played a strong hand in designing it too. Today Mexico has a … comprehensive set of rules if you’re looking to start a crypto business in the country. I’m delighted that we’ve been able to meet people at virtually every relevant regulator in Mexico or a regulator in Mexico. We have always found people in each of these institutions who are willing to listen and are intrigued by the technology. “
Bitso faces a new regulatory challenge in Argentina, where it recently expanded its business. The company is re-entering a volatile market where people are demanding a reliable solution. More than 100,000 Argentines have joined the exchange and after 8 months of launch made Bitso the largest exchange in Argentina. Daniel is excited about the possibility that crypto can really change the lives of people there and in the rest of the region.
“We believe that in Latin America you have an immediate opportunity to create real use cases. Because trust in financial institutions is being undermined, access is very limited, and there is a very large need for these financial services and products.” We firmly believe that a radically improved financial system will be created on top of this technology. “
Listen to Block Stars ‘latest podcast episode to learn more from Daniel about the state of crypto in Latin America, how Bitso almost became a specialist in video game payments, and to find out which rock band didn’t have an entry in his parents’ encyclopedia .