Latin America - Banxico & Inflation / Chivo / UN Vote / Castagneto / Brazil's CBDC
Critical Policy Intelligence for Latin America Bitcoin & Blockchain
I hope you are having a great Friday. Thanks again for reading Barracuda Briefing.
In case you missed it, here are the latest Barracuda Insights (for paying subscribers) to keep you up-to-date:
In Colombia, a ‘pig butcher’ scam’s victims linked back to Binance and Huobi exchange transactions | 22 February 2023
Salvadoran president Nayib Bukele’s cyber surveillance tactics raise specter of US sanctions | 9 February 2023
Russia-Iran cooperation around a gold-backed stablecoin could signal next steps for Venezuela’s Petro | 1 February 2023
Mexico’s Bitcoin Billionaire Ricardo Salinas Pliego’s ally in congress steps into the 2024 presidential race | 25 January 2023
In Colombia, a blitz of regulatory action against US crypto firms is threatening the country’s pilot | 18 January 2023
Here is the most critical policy intelligence from this week if you are a Bitcoin, blockchain and/or financial technology professional making decisions on Latin America.
Mexican Central Bank Chief Victoria Rodriguez will be judged on whether or not her institution, Banxico, can tame inflation this year. It is an important issue for the ruling party of president AMLO (2018-2024) as election season heats up. The inflation narrative will also shape Mexico’s financial technology narrative of CBDCs and Bitcoin legalization.
El Salvador’s Chivo wallet was at the center of an IMF report on CBDCs for Latin America. The IMF found that running the state-backed Chivo wallet and FIDEBITCOIN, the trust that backs it, costs Salvadoran tax payers 0.1% of GDP. The fund found that Chivo processed around 5,000 daily transactions in 2022 and 88% of Bitcoin transactions to Chivo involved conversion into US Dollars. Salvadorans continue to overwhelmingly prefer cash over Bitcoin for remittances.
El Salvador in February opened a Texas-based Bitcoin Embassy. These embassies behave like Bitcoin Chambers of Commerce, according to Bitfinex. Bitfinex is one of El Salvador’s main technology providers for the volcano bond. Bitfinex claims that the Lugano and Texas Bitcoin Embassies are targeting Bitcoin miners and want to court them to invest in mining infrastructure in El Salvador.
Venezuela & El Salvador abstained from a UN vote on the Russia-Ukraine war. Venezuela and El Salvador abstained from a vote on whether or not the Russian military should leave Ukraine. Nicaragua voted in favor of the Russian position. Russian state-owned firms have financial technological, energy-related and other geopolitical interests in Venezuela and Central America.
Colombian victims of crypto scams are gaining legal support. The Public Prosecutor’s Office (Fiscalía General de la Nación) have contracted members of the AsoBlockchain team in Bogotá to provide crypto and legal support services to victims of scams, ponzis and frauds.
Argentina’s tax authority AFIP reported significant seizures of crypto mining equipment crossing the border. Argentina’s tax chief Carlos Castagneto is leading a campaign to rein in unlicensed Bitcoin mining equipment at ports around the country.
Brazil’s Central Bank Chief Roberto Campos Neto is rolling out a CBDC pilot. The pilot started in February and will likely end in December 2023. The bank is evaluating how Brazil’s digital real currency stands up to security and privacy regulations.
Latin America & The Caribbean: In its 17 February report on CBDC development in Latin America & The Caribbean, the IMF characterized Argentina, Brazil and Colombia as having the most advanced regulatory framework for crypto assets. CBDCs are already active in Jamaica and the Bahamas.
Barracuda Briefing is a weekly analysis of critical policy & power shaping Bitcoin and blockchain in Latin America. It goes out to subscribers for free every Friday.