Latin America - Circle / Nayib / TRON in Brazil / Petro / Milei / Yellen
Critical Intelligence on Latin America Bitcoin & Geopolitics
I hope you are having a good week and a great start to 2024. Thanks again for reading Barracuda Briefing. Like I’ve mentioned before, after pausing publication during this transition period, Barracuda is now moving to a slightly modified publishing schedule. Barracuda Briefing will go out once a month and there will be a full pay wall.
In case you missed it, here are the most important Barracuda Insights from 2023 to keep you up-to-date on the intersection of Bitcoin, geopolitics & Latin America:
El Salvador launched an investor visa… It will be administered by Tether | 13 December 2023
Venezuela-based crypto firm BCI Technologies is a Hezbollah money laundering vehicle | 27 October 2023
Gabriel Galipolo gains more influence over Brazil’s Central Bank | 11 May 2023
OFAC dismantled a network of Chinese and Guatemalan fentanyl precursor merchants with ties to Mexico’s Sinaloa Cartel | 20 April 2023
Russia-Iran cooperation around a gold-backed stablecoin could signal next steps for Venezuela’s Petro | 1 February 2023
If you want to get smart on the geopolitics, critical policy decisions & financial crime shaping Bitcoin and banking in Latin America, read this:
Circle’s Mexico Strategy | US stablecoin firm Circle has been quietly setting up relationships with banks in Mexico while elbowing out its competitor, Tether. According to sources I’ve spoken with, Santander, Banco Azteca and BBVA are among at least three banks that Circle is in talks with. In August 2023, Coinbase took an undisclosed stake in the firm. A week ago, Circle said it is preparing for an IPO. Tether is understood to have tried to gain access to Mexico’s enormous remittance market, but so far it has failed to gain a meaningful foothold inside of Latin America’s second largest market.
El Salvador BTC back in the black | According to the Nayib tracker, El Salvador’s Bitcoin holdings crossed the break even level in December 2023. For all of the doubt sewn around El Salvador’s Bitcoin legalization policy, it hasn’t broken the country’s financial system. But there are still plenty of questions about the intentions of Bukele’s government with the policy and in particular, the role that Chivo payment rails will play. There are also outstanding questions about the country’s checks on money laundering and its track record in rooting out corruption.
TRON targets Brazil | Brazil’s largest digital asset exchanges, Mercado Bitcoin, began hosting Chinese entrepreneur Justin Sun’s TRON token, TRX. The move comes as Mercado Bitcoin attempts to diversify and add tokens issued on TRON’s blockchain. Mercado Bitcoin is led by former Deloitte professional Roberto Dagnoni. Under Lula da Silva’s command, the $1.6 trillion US dollar economy will try to carve a pathway between the West and China as it sets up financial infrastructure for digital banking. China-based TRON competes directly with more Western-centric Bitcoin and Ethereum blockchains. Sun’s Huobi exchange is a competitor with US Coinbase, which entered the Brazilian market in late 2021.
Venezuela shut down the Patria Platform | Nicolas Maduro said that his government will begin to wind down the petro, Venezuela’s central bank digital currency (CBDC), this week. The wind down of the platform that allowed trading of the CBDC started on 15 January. Launched in 2018 by a team involving Gabriel Jimenez and Carlos Vargas, the Petro was once promised to be the bedrock in a new financial infrastructure for Venezuela’s troubled economy. Now, the petro and crypto more broadly is associated with a long list of financial crimes and dysfunction in Venezuela.
Milei: Central Bank Killer | Bitcoiners have been cheering on Javier Milei as he promises to kill the Argentine central bank and make policy with Austrian economics. Milei is probably more important for Bitcoin geopolitics than Bitcoin geopolitics is for Milei. Milei has plenty of tools to change the economy’s course and he doesn’t need Bitcoin to dollarize. There is also an obvious asymmetry here that is important to note: bitcoiners with no skin in the game get to watch Milei’s political experiment from the sidelines; voters who depend on Argentina’s financial infrastructure have little say in what will replace the peso and traditional banking infrastructure - if Milei’s reforms do indeed go through that is.
Washington and Binance | It was just a matter of time. Yellen named the settlement against Binance and CZ as one of last year’s top financial crime enforcement campaigns for Treasury and FinCEN. Binance was one of the main platforms for Iranian money transfers and Russian darknet marketplaces, according to the US DOJ. It was also popular among a myriad of users in Latin America who wanted to buy and sell drugs or circumvent sanctions. Now that Binance will be under pressure to crack down, two things can be expected. First, it is likely that some illegal financiers will experience difficulty in moving money around the globe. Second, the take down of Binance means that there is opportunity for other, less regulated exchanges (i.e. Bybit and Huobi, etc.) to take illegal finance market share.
Barracuda Briefing is a monthly report on the critical policy issues & powerful figures shaping Bitcoin and blockchain in Latin America.