When we are looking at which markets could really benefit from Bitcoin and digital currency, Latin America comes to everyone’s mind at some point. With Latin American national currencies being very volatile and high remittance costs for sending and receiving money internationally, it looks to be a perfect breeding ground for Bitcoin adoption.
Peru : Not to keen on Bitcoin just yet
As is the case with most parts of the world, you have to take the good with the bad unfortunately. Peru hosted a startup incubator challenge, called Digital Bank Latam 2014, with the goal being to showcase new ideas which could improve the domestic banking industry. Bitcoin could definitely improve the financial situation, so BitInka took the center stage.
BitInka is a Peru-based Bitcoin startup, founded by Roger Benites, and aims to offer banks solutions to fiat exchange restrictions in the region. Even though the idea itself has a lot of potential, the Digital Bank Latam 2014 was not too convinced with the idea of using Bitcoin.
Part of this is due to very low Bitcoin awareness in Peru on one side, and banks frowning upon digital currency on the other hand. Furthermore, Bitcoin business in Peru are almost nonexistent, leading to a lot of questions being raised.
“The [competition] placed BitInka as a bank, and [judges] did not understand how using bitcoin to collect funds would benefit them,” Roger Benites said. BitInka was also the only Bitcoin startup to be part of Digital Bank Latam 2014, making it the “oddball” in the group.
The reason why BitInka was classified as a bank is because of the services offered. By combining a digital wallet and an exchange platform, users can send and receive Bitcoin and fiat currencies. Supported fiat currencies are US Dollar, Argentine Peso, Bolivian Boliviano, Peruvian Sol and Venezuelan Bolivar.
Venezuela : Bitcoin could offer a ‘legal’ way of getting US Dollars
Even though Peru still has a long way to go in regards to becoming a Bitcoin hotspot, another Latin American country seems to be on the right track. Venezuelans are looking to bypass the country’s broken economy by using Bitcoin to obtain dollars, make internet purchases and disrupt the current system.
If everything goes according to plan, we will see the very first Venezuelan Bitcoin exchange opening its doors to the public this week. Said exchange is run by two New York-based Venezuelan brothers (Kevin & Victor Charles), and with several hundred Bitcoin enthusiasts, business could pick up quite quickly.
You may have noticed I mentioned Venezuelan Bitcoin enthusiasts want to use the digital currency to acquire dollars. In its current state, it is virtually impossible to acquire fiat currency in Venezuela, unless you request it through the government, which can hardly keep up with the demand as it is. A shady black market is the only other option at this, so Bitcoin would be a more than welcome third option.
While the Venezuelan government has not taken an official stance on Bitcoin on digital currency, they have not outlawed the currency either. While Bitcoin remains “a grey area”, it is an excellent way to rebel against the system.
Until Venezuela’s first Bitcoin exchange launches, digital currency trades take place amongst enthusiasts who make deals through internet forums and social media. One person claimed to purchase a partial Bitcoin so he could order a new cell phone battery on Amazon. As Amazon only accepts USD, and fiat currency is hard to get in Venezuela, this person used his partial Bitcoin to buy an Amazon Gift Card and pay for his order.
The first Venezuelan Bitcoin exchange could face one major difficulty though : getting a supply of Bitcoins. One of the options on the table is to have Venezuelans mining their own Bitcoins, because of very cheap electricity costs compared to the United States.