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Business Opportunities for Bitcoin in Latin America
Business Opportunities for Bitcoin in Latin America
Business Opportunities for Bitcoin in Latin America
Business Opportunities for Bitcoin in Latin America
Business Opportunities for Bitcoin in Latin America
Business Opportunities for Bitcoin in Latin America
Business Opportunities for Bitcoin in Latin America
Business Opportunities for Bitcoin in Latin America
Business Opportunities for Bitcoin in Latin America
Business Opportunities for Bitcoin in Latin America
Business Opportunities for Bitcoin in Latin America
Business Opportunities for Bitcoin in Latin America
Business Opportunities for Bitcoin in Latin America
Business Opportunities for Bitcoin in Latin America
Business Opportunities for Bitcoin in Latin America
Business Opportunities for Bitcoin in Latin America
Business Opportunities for Bitcoin in Latin America
Business Opportunities for Bitcoin in Latin America
Business Opportunities for Bitcoin in Latin America
Business Opportunities for Bitcoin in Latin America
Business Opportunities for Bitcoin in Latin America
Business Opportunities for Bitcoin in Latin America
Business Opportunities for Bitcoin in Latin America
Business Opportunities for Bitcoin in Latin America
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Business Opportunities for Bitcoin in Latin America

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A deep-dive analysis of current business opportunities for Bitcoin in Latin America. Presentation was originally given by Adam Stradling, CEO of Coin4ce.com, at the 1st Latin Bitcoin Conference in …

A deep-dive analysis of current business opportunities for Bitcoin in Latin America. Presentation was originally given by Adam Stradling, CEO of Coin4ce.com, at the 1st Latin Bitcoin Conference in Buenos Aires in December, 2013.

Published in: Economy & Finance, Business
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  • 1. Latin American Bitcoin Opportunities By Adam Stradling CEO and Founder of Coin4ce.com 1
  • 2. Latin America at Glance Comprised of 21 countries with a total population of 590 million people, ~67% Spanish speaking, ~33% Portuguese speaking. Combined GDP of the region is more than 5,3 trillion USD Four main economic zone: The Pacific Alliance, Mercosur, Central America, and the Caribbean. 2
  • 3. The state of Bitcoin in Latam Three main adoption waves This is a graph of people searching for “Bitcoin” in Google The number 100 represents the peak search interest 100 2nd wave 3rd wave 1st wave Early adopters Source: http://bit.ly/14Jm4BS Trough of disillusionment 3
  • 4. The state of Bitcoin in Latam The geographic locations of the searches The first adoption wave happened in the US, Germany, Russia, and Australia June 2011 – 1st adoption wave Source: http://bit.ly/14Jm4BS 4
  • 5. The state of Bitcoin in Latam The geographic locations of the searches 2nd adoption wave hits US, Europe, Russia, etc – Latam, India, Africa start 1st adoption wave March 2013 – 2nd adoption wave Source: http://bit.ly/14Jm4BS 5
  • 6. The state of Bitcoin in Latam The geographic locations of the searches Current adoption wave Chile, Peru, Colombia and Venezuela starting to adopt Bitcoin for the first time. Source: http://bit.ly/14Jm4BS 6
  • 7. Opportunities? What is needed most right now? Basic Infrastructure, Integration, and Education: • Integration of local payment methods to global Bitcoin ecosystems • Liquidity pools for local currency-denominated exchanging Bitcoins • Easy merchant integration and adoption • Education on Bitcoin in Spanish and Portuguese Overall, very similar state to the US and EU two years ago. So what is the basic infrastructure of for a Bitcoin ecosystem? 7
  • 8. Basic Infrastructure – Global Ecosystem 8
  • 9. Basic Infrastructure – Latam Providers Exchanges – Trading, P2P : Exchanges – Fixed Rate: Payment Processing: Other: 9
  • 10. Opportunities? Regional Stickiness Financial: Equity, Stocks, Lending … ? Gift cards, debit cards … ? eWallets and Banking … ? Are these undiscovered opportunities for regional businesses? It depends … on: • Competition: international incumbents –vs- local start-ups • Technology: replication –vs- white-labelling –vs- timing • Traditional finance and regulation: crypto-finance moves “mainstream” • Stickiness: Regional/language-based services –vs- naturally global • Customer: Client segmentation –vs- adoption rates The lens through which Latin and International companies will succeed or fail? 10
  • 11. Business Opportunity Comparison for Latam Payment Processing: Merchants Exchanges: Trading, Fixed Rate, P2P Positives: Vast market, B2B sales/sticky, low regulation, high incentives in latam, leapfrog possible, fundamental Positives: Fundamental, FR is low tech, lending/other, P2P outside reg, trust-based Challenges: Technology lead-time, sales cycle, pan-latam local liquidity, monopolies, traditional incumbents (money 2020) Challenges: Traditional finance entry point, lightening rod, banking challenges, technology risk, liquidity eWallets and Banking: Financial: Investments, Other Positives: Accredited rules, no tech risk, easy calls, HNWI face-time/sticky, low capital Challenges: Building HNWI clients (in latam), trader/optimize, education Positives: No payments or banks, no regulation, B2C, mobile solutions, 1st time-users Challenges: Easy access global incumbents, technology lead-time, cashing in/out 11
  • 12. Opportunities? Next Gen & Undiscovered And what’s happening outside of Basic infrastructure in Latam? Things past generation 1 type services? Firmcoin Qixcoin Further, what are the big undiscovered opportunities for Bitcoin based on the needs of the people in Latin America? 12
  • 13. Who is using Bitcoin and why? The viral loop for market participants Individual Users Value transfer system for unbanked populations Store of value for protection or control Privacy of users, convenience, security, micro-trans International remittances, mobile, Individuals Merchants Merchants Less expensive than Credit Cards Instant access to global market Circumvent current payments patchwork - gambling Investors Investors Need fundamental non-speculative demand More investment fuels user growth and merchant Venture funds, hedge funds 13
  • 14. Bitcoin in Latin America – Country Applications 14
  • 15. Bitcoin in Latin America – Individual Users Highlights: • Users – Local Transfers : In Chile and Peru, local bank transfers are instant, irreversible, and free • Users – Wealth Protection: Argentina, Venezuela, obvious choices. Conversely, other Latin Economies coming off boom-times, so average person in other geographies isn’t looking for “wealth protection”. • Users – Remittances: Big opportunities between Latin countries and LatAm to international: Paypal, wire transfers, and other methods expensive, time-consuming, and not user friendly. • Users – Unbanked: Although great long-term opportunity exists, early adopters are different demographic. • Gaps: Would love to chat with people about their views on applications, fill in the blanks. 15
  • 16. Bitcoin in Latin America – Individual Users Highlights: • Users – Local Transfers : In Chile and Peru, local bank transfers are instant, irreversible, and free • Users – Wealth Protection: Argentina, Venezuela, obvious choices. Conversely, other Latin Economies coming off boom-times, so average person in other geographies isn’t looking for “wealth protection”. • Users – Remittances: Big opportunities between Latin countries and LatAm to international: Paypal, wire transfers, and other methods expensive, time-consuming, and not user friendly. • Users – Unbanked: Although great long-term opportunity exists, early adopters are different demographic. • Gaps: Would love to chat with people about their views on applications, fill in the blanks. 16
  • 17. Bitcoin in Latin America – Merchants Overall, Latin merchants will really like using Bitcoin, because: • Many latam credit card systems are monopolies with multiple hands in the transaction chain • The sign up process with the local payment gateways to accept foreign credit card can literally be lengthy • Major monopolies on other payment forms like pre-paid access, stored value, etc • So fees and rates are always above 5% • Lack of mobile POS systems like Square – Bitcoin could leapfrog mobile credit card POS systems • Credit card interest rates are ridiculously high across all of Latin America • Many cash networks have 24-48 hour confirmation times 17
  • 18. Bitcoin in Latin America – Investors Investors, a more conservative approach: • Institutions in countries with a high risk of regulation will be slow to invest in Bitcoin: Brasil, Argentina, and Venezuela • In the more progressive countries with little currency pressure and a strong banking and investments structure you’ll see faster movement: Chile and Uruguay. • Chile is capital for international banks to deploy operations across LatAm • Individuals will continue to be strong investors in Bitcoin and I think that will be a continued throughout Latin America 18
  • 19. Capturing Opportunities: Doing Business Pan-Latam There are over 20 nations in Latin America Each with their own legal, regulatory, and tax structures. There are also different cultures to consider. So what’s the best strategy for expansion? How have others done it? Northern cone, Southern Cone, Caribbean, Central America Depends on your goals, resources, and products 19
  • 20. Economic collaboration in the region Current Members: • Mexico • Colombia • Peru • Chile • Costa Rica The goals of the alliance: • Increase of economic and trade integration • Focus on growing free trade of goods, services, investment and human capital • To promote the development and competitiveness in each member country • Response to Mercosur, which has halted Results from the Alliance: • MILA – market cap and population more than Brasil • Banking integration – A SEPA zone for Spanish West Coast • Tax and legal passports • More 20
  • 21. Doing business in LatAm IFC – Rankings Only five LatAm countries rank in the top 55 globally • Chile – 34 • Peru – 42 • Colombia – 43 • Mexico – 53 • Panama – 55 Financial Freedom Index Only six LatAm countries rank in the top 100 globally • Chile – 7th (above USA) • Uruguay – 36th • Colombia – 37th • Peru – 44th • Mexico – 50th • Panama – 71 Cultural differences • Things move slowly in most LatAm countries • Language barrier – Portuguese and Spanish • Different landscape in each country 21
  • 22. Why enter LatAm now? US / EU / Russia Level of Regulation • • Second/Third adoption wave Regulation has begun (favors incumbents) • Expense is pricing out start-ups Window of opportunity to become regional incumbent before regulation prices out start-ups LatAm • • First/Second adoption wave Research shows virtual currency regulation doesn’t exist • Regulators are not aware of them … yet Degree of Adoption 22
  • 23. About Coin4ce Coin4ce will make it easy for people in LatAm to buy, sell, and safely use Bitcoin. Our services will: • • • • allow users to instantly buy or sell bitcoins via local banking / payment methods connect LatAm to the global Bitcoin eco-system help set the stage for mainstream adoption across the region largest dealer of Bitcion in Chile, have transacted hundreds of thousands Adam Stradling: Founder and CEO • • Former Co-founder and COO of Tradehill, Inc – largest US-based Bitcoin exchange Founder of 4CE – 5 years exp in BFSI consulting and recruiting, Chile based Philippe Camacho: Co-founder and CTO • • PhD in Computer Science, U of Chile – focus on Cryptology and Computer Security Published in: RSA, Latincrypt, and more Jacob Lundberg: Co-founder and Advisor • • Equity Research Associate, Credit Suisse, New York Notre Dame MBA (Investments focus), lived / worked in Chile three years Antonio Vera: Software Engineer • PhD in Computer Science, U of Caen, France – Analysis of Algorithms 23
  • 24. Bringing Bitcoin to Latin America! Email us to learn more Adam Stradling: Founder and CEO | adam@coin4ce.com Philippe Camacho: Co-Founder and CTO | philippe@coin4ce.com 24

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