Welcome to Latam Insights, a compendium of Latin America’s most relevant crypto and economic news during the last week. In this issue: The Salvadoran government pushes a bitcoin banking bill, president Milei states bitcoin will compete with other currencies in Argentina, and the Wasabi Wallet lead dev declares that bitcoin developers “have failed” El Salvador. […]
Bitcoin News
Salvadoran Government Introduces Bitcoin Banking Law Reform
The Salvadoran government has presented an initiative to accelerate the inclusion of Bitcoin and other cryptocurrencies in its investment banking sector. The banking law reform introduced to the National Assembly would allow private investors to constitute banks that can provide services in Bitcoin and stablecoins for sophisticated investors Salvadoran Government Presents Bill to Allow Private […]
Bitcoin News
Argentine Officials Met With Salvadoran Regulators to Discuss Bitcoin Adoption and Regulation
Argentine officials of the CNV, the country’s equivalent to the U.S. SEC, and Salvadoran officials of the CNAD, the National Commission for Digital Assets, met on May 23 to discuss bitcoin regulation and adoption issues. This meeting was the second between these two institutions and hints at a possible regulation agreement between the two countries. […]
Bitcoin News
Salvadoran Official Crypto Wallet Chivo Dismisses Alleged Hacking Event
Chivo wallet, the official cryptocurrency wallet of El Salvador, has dismissed an alleged hack of the source code of its software and the data of over 5 million users linked to the wallet’s KYC procedures. According to Chivo, the data of Salvadorans is protected, and the security of its data has never been breached. Chivo […]
Bitcoin News
Salvadoran Press Raises Doubts on Piggy Bank Funds’ Ownership: 80% of BTC Came From Bitfinex
Reports from local Salvadoran press are raising questions about President Bukele’s announcement last week, when he transferred 5,690 BTC to a cold wallet, stating that all of these belonged to the country. Moises Alvarado, a Salvadoran journalist, found that 80% of the funds in this wallet came from Bitfinex, an international exchange, while 20% came […]
Bitcoin News
Salvadoran Bitcoin Volcano Bonds Target Q1 2024 Launch After Getting Regulatory Approval
Discussion on the Volcano Bonds, a series of digital debt instruments that would be used to finance the creation of Bitcoin City, has resurfaced after their regulatory approval in El Salvador. The Bitcoin Office in the country revealed that it anticipated a launch date of Q1 2024 for these bonds.
Volcano Bonds Might Be Issued in Q1 2024
The Salvadoran Volcano Bonds might be launched next year, according to the National Bitcoin Office. The institution, created by President Nayib Bukele last year to manage and oversee bitcoin projects in the country, reported the approval of the regulation that will support the issuance of these bonds.
It stated:
The Volcano Bond has just received regulatory approval from the Digital Assets Commission (CNAD). This is just the beginning for new capital markets on bitcoin in El Salvador.
Furthermore, the office anticipates that the launch of these instruments will happen during Q1 2024. Stacy Herbert, director of the Bitcoin office, stated that they were currently working on determining the size of the bond offer, which is expected to reach bn.
In an interview with El Salvador, a local newspaper, Herbert explained:
Our interest is to develop new capital markets in bitcoin and the issuance of the first sovereign bond backed by bitcoin will help us achieve this.
The bonds will be issued through Bitfinex Securities, a company that received approval as a digital assets service provider in the country and will reportedly use Blockstream’s Liquid network. Bukele first revealed the Volcano bonds in 2021 when he announced the construction of the so-called Bitcoin City, which would be financed with funds from these bonds.
However, their issuance has been delayed for several reasons, including the lack of a regulatory framework for digital securities in El Salvador. In September 2022, Bitfinex CTO Paolo Ardoino acknowledged this issue, revealing that the company would take two or three months more to have everything prepared after the approval of this law.
What do you think about the Volcano Bonds and their upcoming launch? Tell us in the comments section below.
Latam Insights: Unlicensed Crypto Exchanges Still Allowed to Operate in Brazil, Lightning Strikes Salvadoran Bitcoin ATMs
Welcome to Latam Insights, a compendium of Latin America’s most relevant crypto and economic news during the last week. In this issue: The Central Bank of Brazil confirms that unlicensed exchanges can still operate in the country; El Salvador will integrate Lightning Network transactions in its Chivo ATM network; and Trubit raises .25 million to expand crypto adoption in Latam.
Central Bank of Brazil Clarifies Exchanges Still Don’t Need Licenses to Operate
The Central Bank of Brazil issued a statement clarifying the state of the cryptocurrency regulation in the country regarding the operation of unlicensed exchanges. In its 40,874 communication, the bank revealed that the conditions and deadlines for virtual assets services providers (VASPs) to adapt to Brazil’s cryptocurrency law would be established in a normative act later.
Furthermore, João André Calvino Marques Pereira, head of the financial system regulation department of the bank, revealed that crypto platforms can still operate without a license during this period.
In the bank’s document, Calvino Marques stated:
Until the normative act on the matter comes into force, virtual asset service providers will be able to operate independently of prior authorization from the Central Bank of Brazil.
Salvadoran Bitcoin ATMs to Support Lightning Network
The ATMs of the Salvadoran Chivo network will integrate Lightning Network (LN) support. Matias Goldenhorn, CEO of Athena Bitcoin, the company that provides these ATMs to El Salvador, declared that they plan to have 100 Bitcoin ATMs supporting LN transactions by year’s end.
Nonetheless, Goldenhorn recognized that including LN support for all Bitcoin ATMs in El Salvador would take Athena at least two or three months more. Athena’s Bitcoin ATMs in other countries will be updated in 2024.
Only a small number of all the Bitcoin ATMs in the world have integrated LN transactions, so for Greenhorn, Athena’s move is a “revolution,” given that now Salvadoran users will be able to benefit from the low fees of the platform and the added privacy of not having their transactions registered on the Bitcoin blockchain.
Trubit Raises .25 Million to Expand Crypto Adoption in Latam
Galactic Holdings, the parent company of Trubit, a cryptocurrency exchange platform, raised .25 million in Series A funding round. Led by Galaxy Interactive and Dragonfly, the round will allow the company to expand its operation in Latam, focusing especially on payment services for retail and institutional customers.
Maggie Wu, cofounder and CEO of Trubit, thanked investors for their support, stating that the company was committed to “further expanding our presence in more Latin American countries to make cryptocurrency services accessible to everyone in their daily necessities, more simply and conveniently.”
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Salvadoran Vice President Felix Ulloa: Bitcoin Adoption Fueled El Salvador’s ‘Rebirth’
The Salvadoran vice president, Felix Ulloa, has given his opinion about the relationship between the “rebirth” of the country and the adoption of bitcoin as legal tender in a recent interview. For Ulloa, bitcoin has been an important factor, alongside others, in this revamp of El Salvador, drawing crypto-related investments and tourists to the country.
Salvadoran Vice President Felix Ulloa: Bitcoin Enthusiasm Attracted Investors
The Salvadoran vice president Felix Ulloa linked the positive developments in the country’s economy and the adoption of bitcoin as legal tender. El Salvador became the first country to adopt bitcoin as legal tender back in 2021, under the guidance of Salvadoran president Nayib Bukele.
While some multilateral organizations like the International Monetary Fund (IMF) questioned this, heavily criticizing Bukele’s actions and calling on the country to drop the plan, Ulloa stresses that this has had a positive effect on the country.
In a recent interview, Ulloa told Forbes:
The enthusiasm that started in the sphere of the digital economy, with bitcoiners, where El Salvador, having positioned itself as the first country to adopt a cryptocurrency as legal tender, was at the forefront and attracted many investors who are in fact installed in Salvador.
Tourism, Bitcoin, and Development
For Ulloa, another industry that has seen a sharp recovery after the Covid-19 pandemic has been tourism, with this increase being linked to the country’s new security policies and bitcoin.
Bitcoin as legal tender makes it easy for tourists who enter the country to pay for goods and services without worrying about currency exchanges, Ulloa stressed.
President Bukele had linked bitcoin and the recovery of the tourism industry before. In August 2022, Bukele stated:
Only a handful of countries have been able to recover its tourism to pre-pandemic levels. And that’s international tourism, so the reasons behind it are mostly bitcoin and surf.
However, Ulloa takes this link even further, explaining that these two (tourism and bitcoin) are part of the recovery that El Salvador experienced during Bukele’s administration. He detailed:
Without a doubt, tourism and the use of digital currencies go hand in hand and are a sign of that future and the rebirth of our country.
What do you think about Felix Ulloa’s thoughts on the influence that adopting bitcoin as legal tender has had on the economic recovery of El Salvador? Tell us in the comments section below.