TruBit CEO Maggie Wu: Latin America is a natural fertile ground for cryptocurrencies

Source: Xiaguang Society

Latin America, this distant foreign land full of magical realism, is now becoming a natural fertile ground for the cryptocurrency industry.

Latin America is in the midst of an economic upswing, with a rising middle class and booming consumption, but traditional financial supply is poor and in short supply. Therefore, the entrepreneurial boom in inclusive finance is timely and thriving. On the other hand, many Latin American countries have severe inflation and frequent exchange rate fluctuations, and the influx of foreign capital and foreign companies has driven strong cross-border payment demand. Based on this, using blockchain technology to process transactions between different currencies and settlements between transactions has become a rigid demand.

Maggie Wu, a Chinese entrepreneur who went all in on the blockchain encryption industry in 2017, accurately captured this business opportunity. At the beginning of 2020, Maggie Wu and her team founded the brand TruBit in Latin America, a compliant digital currency platform that integrates a wallet (TruBit), a trading platform (TruBit Pro) and a commercial payment platform (TruBit Business). Since its establishment, TruBit has obtained financial technology and payment regulatory licenses in Mexico (VASP), Argentina (VASP and PSP), Peru (VASP) and other countries, and has connected with local banks to open up the deposit and withdrawal of cryptocurrencies to fiat currencies.

Today, TruBit has become the platform with the most cryptocurrency licenses and fiat currency deposits and withdrawals in Latin America, and has never had any security incidents in the four years of operation.

Today, decentralized financial services have become an important development trend of Global Fintech. TruBit is starting from Latin America and gradually exploring the possibilities of the global market.

Recently, Xiaguangshe and Maggie Wu had an in-depth exchange on the development status and future opportunities of the Latin American financial technology market.

The following is a summary of Maggie Wu's views:

• Today, Latin American countries, represented by Mexico, are becoming emerging manufacturing centers that have emerged under the global supply chain reconstruction and the US "nearshore outsourcing" policy. More and more companies from all over the world have landed in Latin America, and the import and export trade volume between them and Latin America has also increased year by year, thus driving a booming demand for cross-border payments. However, the banking system in Latin America is relatively backward, with 26% of the population still without bank accounts, and the flow of funds is relatively slow. In addition, countries such as Argentina are in serious foreign exchange difficulties. On the third day of his inauguration, the new Argentine President Milley devalued the Argentine peso by more than 50% to 800 pesos per dollar, and will maintain a stable depreciation pace of 2% per month thereafter. In this case, overseas companies need stablecoins as intermediaries to trade and settle assets, and blockchain technology provides this option. Whether it is cryptocurrency payment or cross-border transactions, this is what TruBit is doing now, which saves a lot of high handling fees and time costs.

• From the perspective of the Latin American cryptocurrency industry, whether it is holding or comprehensive transactions, Latin America still ranks among the top in the world, with more than 50 million people holding cryptocurrencies. The cryptocurrency markets in Mexico, Brazil, Argentina, and Venezuela are all quite strong and diversified. Especially in Argentina, the stablecoin market is in a leading position in Latin America. According to the "2024 Cryptocurrency Geography Report" released by blockchain analysis agency Chainalysis, Argentina's stablecoin transaction volume share is 61.8%, slightly higher than Brazil's share (59.8%), and much higher than the global average (44.7%). Although compared with the United States, the largest cryptocurrency market, Latin America as a whole is still a niche market and has not yet reached a large volume, compared with other countries in the world, the Latin American market is already very active. One of the most watched summits in the field of cryptocurrency, the Ethereum Developer Conference, will also be held in Latin America in 2022 in Bogota, the capital of Colombia. Ethereum founder Vitalik Buterin will also be present.

• Latin America's current economic development momentum is indeed relatively good, and local wages are getting higher and higher, driving the booming consumer market. And Latin Americans are very willing to spend. Most families are multi-generational. Latin Americans spend their money on daily family needs and have almost no savings habits. From the perspective of consumer demand, there is indeed a strong tendency to borrow and overspend; but from the perspective of traditional financial institutions, most banks in Latin America are European and American banks such as Citibank, BBVA, and HSBC, but most of these institutions serve high-end users and have no motivation to update services to cover more income groups and promote inclusive finance. The huge gap between the demand side and the supply side makes the fintech track in Latin America promising. Among the top ten unicorn companies in Latin America, 80% are fintech companies, accounting for 70% of the market value.

• In addition to strong consumer demand and scarce financial services, Latin America itself also has some economic foundations and business environments for financial technology entrepreneurship. First of all, Latin America has a large population base of 650 million people and a per capita GDP of more than 10,000 US dollars, which is almost the same as China; secondly, the Internet penetration rate here is high, and the official attitude towards cryptocurrencies is relatively friendly; and countries such as Brazil and Argentina have relatively strict foreign exchange control policies, and inflation is very serious, so settlement through stablecoins has become a rigid demand; this is a market with very obvious market demand and pain points, but doing financial technology in Latin America not only faces language challenges, but also has to meet regulatory compliance requirements, and also has to have a multi-faceted knowledge system of legal, technological, financial and other aspects, which requires high requirements for entrepreneurs, so Latin American financial technology is still a blue ocean market.

• Overall, there are still very few people with Chinese backgrounds doing Fintech startups in Latin America. The relatively large ones are Stori and TruBit, and most of the others are financial lending companies going overseas to Latin America. At present, the competition in the micro-lending market in Latin America is already very fierce, because this industry does not have too many thresholds and competitive barriers. At present, the main force of the Latin American entrepreneurial ecosystem is basically composed of two types of people: one is Latin Americans who were born and raised in the United States, who got venture capital funds from Silicon Valley or Wall Street and returned to Latin America to start a business. The success rate is also relatively high, because they replicated the proven mature business model in the United States in Latin America according to local conditions, and compared with local entrepreneurs in Latin America, they have some comparative advantages; the other is families with more reputation and resources in Latin America. But Chinese entrepreneurs are not in these two systems, so basically Chinese who have previous entrepreneurial experience or work in leading financial technology companies in the United States will devote themselves to the Latin American financial technology innovation track, but there are only a handful of people who really do this.

Conclusion: In the past, when transferring money from a Chinese bank account to any foreign bank account, you had to fill in a code called Swift Code, which might take two or three days or even five or six days for the money to arrive, because the whole process required a large number of intermediaries to confirm. But now, with the use of stablecoins under blockchain technology, the time limit has been greatly shortened. Swift's annual fund transaction volume exceeds the global GDP, so even if only 0.1% of transactions are settled using blockchain, this is a trillion-level volume. Today, decentralized financial services have become a global financial technology entrepreneurial trend. Under this general trend, at the beginning of this year, TruBit announced its official entry into the Asian market, and its exploration in the global strategic layout is still continuing.