I hope you are having a great Friday. Thanks again for reading Barracuda.
In case you missed it, here are the latest briefs to keep you up-to-date:
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
Argentina’s YPF is selling electricity to a private Bitcoin miner in the Vaca Muerta region | 12 October
From Latin America this past week, here are the most important updates on Bitcoin, blockchain and crypto politics in the news right now:
Mexico’s financial crimes unit (UIF) is focused on a high profile investigation into the military. A military unit laundered money through a roofing company that acted as a front for the operation. Illicit finance related to corruption in Mexico continues to follow traditional fiat-based practices. Blockchain is scarcely used.
Venezuela-based AmberesCoin reported PetroApp is allowing people to pay with state-backed cryptocurrency petro at Caracas gas stations. What was thought to be a dead-in-the-water crypto appears to be regaining new life. AmberesCoin and Venecrip are among a handful of Venezuelan exchanges close to the Maduro government.
Venezuela is the second adopter for Axie Infinity after the Philippines, according to Chainalysis. Axie is a play to earn blockchain game. Young people in Venezuela seem to want to make money in reliable assets that are easy to transact locally through the petro and internationally.
Guatemala’s most likely successor to Alejandro Giammattei is a congressional loyalist. The president’s preferred candidate is Manuel Conde, a congressman loyal to the president’s political project. Giammattei’s Attorney General jailed journalist Rúben Zamora earlier this year. Conde does not have an open stance on Bitcoin technology but there are several active projects in the country. Elections will be held in June 2023.
Brazilian former president Lula da Silva will challenge sitting executive Jair Bolsonaro on Sunday, 30 October in a runoff election. It is an extremely close presidential race and there will likely be a dispute from one candidate or the other. As the dust settles, it will be important to consider two policy outcomes.
If Lula wins, there will be implications for central bank chief Roberto Campos Neto and the bank’s economist Fabio Araujo, both of whom are behind critical digital infrastructure policy. Araujo is directing the Digital Real (CBDC) policy and is pro-Bitcoin. Fernando Haddad and Gabriel Galipolo’s idea of a SURCOIN for Latin America could be more well received.
If Bolsonaro wins, there will likely be a continuity story for Senator Flavio Arns’ crypto bill, which is currently grid-locked in congress. Arns designed the legislation in 2019 hand-in-hand with Campos, Araujo and the Central Bank. It passed Brazil’s Senate Economic Affairs Committee in February 2022.
Colombia’s president Gustavo Petro is criticizing the Central Bank’s monetary policy after the peso depreciated 35% YTD against the dollar. That begs the question of how Petro will steer the fate of Colombia’s CBDC development. Colombia is historically one of the region’s most independent central banks and Petro’s meddling in policy threatens that tradition of independence.
Colombian banks are petitioning for an extension of the SFC’s crypto regulatory sandbox. A regime change at the presidential level is part of the reason for regulatory caution. Regulators are also cautious because of paranoia involving the pervasiveness of ponzis and other fraud schemes in Colombia at the moment. The AML division of the Colombian Attorney General’s office is investigating Daily Cop, a Cali-based ponzi scheme with 200,000 users. Its leader Juan José Benavides is being held hostage in Argentina. Ponzi schemes in Colombia are sometimes ways to launder drug money.
YPF Luz’s Martín Mandarano on gas-fired crypto mining in Argentina. The firm is targeting 100MW of capacity and moved on to an 8MW mining project from a 1MW pilot. There is a national Bitcoin miner and a foreign miner involved. Norwegian Equinor (formerly Statoil) is exposed to the play.
Mexico, Venezuela and Argentina are top choices for India-based Bitget, according to CEO Gracy Chen. Chen is already in talks with Mexico’s regulators about entering its crypto space. Venezuela is notable because this is an area where US and EU firms will likely move slow in a jurisdiction like Venezuela while non-Western firms could see an edge from moving faster. BitGet is owned by Sandra Lou.
Latin America-focuased Nubank will test a Polygon-built ethereum coin called Nucoin. This marks one of the first homegrown experiments of an internal stablecoin for a Latin American exchange. How regulators and policymakers respond could set a precedent for elsewhere.