Latin America - Elektra \ CoDi \ Bukele's Prison \ Zangilevitch \ Towerbank \ 'Insane' SUR
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:
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
Brazil’s deputy Finance Minister Gabriel Galipolo has a turbulent road ahead with his digital currency proposal SUR | 11 January 2023
Argentina’s Finance Minister Sergio Massa discussed the SUR digital currency initiative for cross-border trade with Brazil’s FinMin Fernando Haddad | 4 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 Bitcoiner Ricardo Salinas Pliego’s Elektra is being slapped with a fine after a Mexican court ruled that it failed to pay taxes. The Mexican retailer and remittance firm has a Lightning Network project for cross-border payments.
Mexican central bank Banxico’s CoDi payments system was supposed to rival Brazil’s PIX. Its adoption has arguably been a failure up until now. As of 2021 there were only 220,000 users; Mexico has a population of 129 million.
President of El Salvador Nayib Bukele inaugurated a new prison this week. The facility will house 40,000 inmates amidst the Central American country’s controversial gang crackdown. Bukele prioritized safety and security following the country’s adoption of Bitcoin in September 2021. In April 2022, the Salvadoran parliament passed a law for the construction of new prisons.
Israeli national Yaniv Zangilevitch bought NSO spyware and supplied it to El Salvador’s police force. Documents from the Mexican military data breach Guacamaya that were seen by El Faro showed Zangilevitch’s firm Eyetech Solutions involved in spyware operations that took place during 2020, 2021 and 2022. Zangilevitch and Bukele are reportedly close friends.
Panamanian blockchain association leader Rodrigo Icaza on 1 February expressed concerns over cyber crime and Pegasus impacting the Central American country’s banking sector. Panamá’s blockchain association is backed by Towerbank, the country’s self-described Bitcoin bank.
A committee of Venezuelan creditors are lobbying the Biden administration. They want an exception to sanctions that are preventing them from buying and selling Venezuelan bonds, according to a 1 February Bloomberg report. The creditor committee holds $12 billion of approximately $60 billion Venezuelan debt. A further relaxation of sanctions could spur Bitcoin-related innovation in the country’s broken banking sector.
Colombian anti-narcotics police brought down a money laundering network that used cryptocurrencies. The police and the DEA in January seized digital wallets holding crypto after an investigation that began in 2021.
Argentina citizens increasingly want stablecoin options in order to hedge against inflation. A recent study commissioned by Americas Market Intelligence found that 53% of crypto holders used stablecoins pegged to a stable asset like the US dollar.
Brazil’s proposed common digital currency SUR is being met with harsh skepticism from the World Economic Forum and other multilateral institutions. One economist at the International Monetary Fund called the idea “insane.” It is not the first time Brazil and Argentina have floated the idea. In the midst of Latin America’s debt crises of 1980s, the two countries chewed on the idea of a common currency called the “gaucho.”
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.