Latin America - Kempis in Lugano \ Bukele's graves \ Buda \ Vaca Muerta mining \ Campos Neto + Lula
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 to keep you up-to-date:
Brazilian Gabriel Galipolo’s SUR idea gets a Lula. Will it get a blockchain too? | 2 November
In Chile, Congress passed a new Fintech law that will regulate crypto | 26 October
The global financial system is splitting in two and Latin America will choose sides | 19 October
Here is the most critical policy intelligence from this week if you are a Bitcoin, blockchain and/or financial technology professional making important decisions on Latin America.
Mexican Senator Indira Kempis was in Lugano, Switzerland last week and met with Bitfinex’s Paolo Ardoino and JAN3’s Samson Mow. Mow says he has sustained conversations with Kempis about Bitcoin legalization in Mexico.
Frida Vargas was poached from Bitso to head Binance’s efforts in Mexico as the firm’s country manager. Vargas was head of business development for Bitso.
Mexican Bitcoin advocate and head of Banco Azteca Ricardo Salinas Pliego wrote in El Universal an idea to end Mexico’s electoral agency (INE) and replace it with a new organization that provides clearer rules. On Twitter, he flirted with the idea of a blockchain-based system.
Guatemalan Presidential candidate Zury Rios sent a team to Lugano, Switzerland last week. Rios is the daughter of General Rios Montt, who has been charged with crimes against humanity for activity during the Guatemalan Civil War.
El Salvador’s government named Josue Lopez as honorary consul to Lugano, Switzerland and opened a chamber of commerce. Lopez is involved in Geneva-based LIAN Group’s Bitcoin Mining venture in El Salvador. COWA Mining is building a solar PV-powered unit in northern Chalatenango.
President Nayib Bukele’s security forces smashed graves in La Libertad. Though sensational and perhaps satisfying to Bukele’s base of voters, this will probably induce more violence - not less. Bukele is under pressure to show key interest groups security advances.
El Salvador’s AG Rodolfo Delgado was reportedly favoring MS-13 gang leaders involved in a Money Laundering Scheme. Delgado headed the Anti-Organized Crime Unit inside the AG’s Office before departing to defend top MS-13 gang leaders. He is Bukele’s chief prosecutor in the president’s “war on gangs.”
In Honduras, JAN3’s Samson Mow is continuing talks with Roatan-based Próspera, he says. Próspera legalized Bitcoin earlier this year on the island of Roatán.
Panamanian lawmaker Gabriel Silva is furious with Panama’s crypto law. Amongst his frustrations is the fact that the original proposal was adjusted for what he calls ‘suspicious’ tokens being included.
One of the questionable tokens, says Silva, is Huobi Token. Separately one of Huobi’s main candidates for moving its exchange HQ is Panama.
Panama’s Banesco incubated and launched a digital bank unit called Wally. Wally is a digital wallet with Mastercard integration. Banesco was founded in 2007 and is run by Venezuelan Juan Carlos Escotet.
Also, note that Panamanian-based exchange Deribit was hacked on 2 November.
Colombian president Gustavo Petro’s Venezuela state visit on 1 November involved normalizing trade, and that has implications for Colombian banks exposed to cross-border trade. Sanctions pressures on key individuals and institutions (like state oil company PDVSA) increased significantly during the period 2014 through 2019. Treasury has begun to lift some sanctions in Venezuela but not all.
Venezuela’s state-run oil firm PDVSA is exploring a project for mining Bitcoin in Monagas state and exploring pilots with partners in the country. This is not from an official PDVSA statement, but rather what we are hearing through our source network.
Separately, a group high-profile Venezuelan and Mexico Bitcoiners were in Caracas this week hosting an event on blockchain.
Crypto regulator SUNACRIP was heavily involved. Criptominer’s Parra and Anibal Garrido spoke about digital asset mining. Mexico’s José Rodriguez, understood to be one of Senator Kempis’ main operatives and influencers on policy proposals, was also at the event.
As Venezuela normalizes, the Ortega Family will play a key role in foreign policy and central bank policy. Calixto Ortega (senior) was named representative to the International Criminal Court in Brussels earlier this year. His son, Calixto Ortega Sanchez, has headed the Banco Central de Venezuela (BCV) since 2018. Ortega is interested in implementing Russia’s MIR payment network. This is an important pair to watch.
In Chile, Buda became the first Chilean crypto exchange to have an account with a traditional bank. A 2018 dispute between exchanges and banks led to legal proceedings and the denial of traditional bank accounts to crypto firms. Buda opened its account with BCI, a Chilean bank owned by the Yarur Family.
In Argentina, US Chevron is back in the Vaca Muerta oil patch, where state-led YPF is engaged with Bitcoin Mining projects. ExxonMobil in April also floated the idea of a Bitcoin Mining pilot in the Vaca Muerta. There are significant sources of flared natural gas here.
Brazilian former president Luiz Ignacio Lula da Silva elbowed out incumbent Jair Bolsonaro for a presidential win on 30 October elections. But he won’t have a total PT alliance in congress. Lula will put more priority on domestic issues compared to foreign policy, say analysts.
Brazil’s Central Bank chief Roberto Campos said in response to Lula’s win that he would work with Lula’s admin in ‘the best way possible’, according to a Reuters story. The chief of the Central Bank stressed the bank’s autonomy. Barring interference from Lula’s government, Campos Neto will run the bank until his term ends in 2024.
Brazilian fintechs Mercado Pago and Nubank both launched internal stablecoins recently (August and October respectively) in a significant push into crypto technology. Mercado Pago says they are experimenting with Web3 products that go beyond e-commerce retail on their platforms. US Point72-backed Zero Hash launched operations in Brazil’s financial capital Sao Paulo as well.