September 9, 2018 12:00 am

The Latin American Crypto Boom Is Underway

The case for crypto is growing in Latin America, and not just because of hyperinflation in Argentina and Venezuela. From bringing financial services to the bankless to funding for startups which has been notoriously difficult to obtain in the past, there’s a quiet transformation under way and its being fueled by crypto.

Crypto startups in Latin America

The old Silicon Valley venture capital model of securing funds simply doesn’t work down here. While there are hubs in places like Guadalajara, Buenos Aires or Mexico City where tech startups may experience a significant advantage over their peers, generally speaking, Latin America is a tough place to get capital.

Not only is income in the region much lower than the U.S. or Europe, it’s significantly more spread out. And the region’s governments aren’t exactly rushing to lend a helping hand either. This has created a pool of talented and ambitious individuals with big ideas and no way to get them off the ground.

To make matters more difficult for would-be entrepreneurs, stock exchanges in the region are difficult to enter and extremely illiquid. To put it into perspective, the total market cap to GDP ratio of the region’s largest stock exchange, the Ibovespa Brasil Sao Paulo Stock Exchange, currently sits at 46 percent while the amount traded vs. GDP in the U.S. weighs in at 146 percent.

With a lack of VC funding, little stock market action and no government support, companies are beginning to turn to crypto to carve out their piece of the pie.

Rootstock may be one of the most promising and exciting crypto projects not just in Latin America but in the entire world. Though it has received backing from some of the biggest names in the crypto space, it’s rarely mentioned when discussing the future of bitcoin. But it should be.

As the first smart contract platform with a 2-way peg to Bitcoin, Rootstock aims to build upon the Bitcoin ecosystem, not only adding greater functionality to the network, but adding value by extension.

Another major player in Latin America’s crypto startup scene, Ripio, formally Bitpagos, Argentina’s biggest exchange, has leveraged its success to launch an ICO in order to build a peer-to-peer credit network, and it’s already secured a partnership with one of the biggest credit card issuers in the region, Naranja. The project will allow users to lend or borrow funds utilizing smart contracts and will even insure lenders if the case of a default.

Like Ripio, Bitso, Latin America’s largest exchange, is also looking to shake up the world of finance. Through the Bitso network, users are already able to send and receive fiat transactions instantly to anyone using the platform, but that’s just the beginning. Bitso is also looking transform the way Mexicans pay their bills, buy their groceries, and even purchase a cup of coffee, though the details of this merchant friendly platform have not yet been revealed.

Adoption gains speed

With the new wave of startups leading the way,……………..>

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Author: Tyler Durden
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