Bitcoin Progress Report: Mexico not threatened by Bitcoin
News that is put out by the mainstream about Mexico runs the gamut. You listen to people who visit and live in Acapulco say it’s a great place, modern and tourist friendly, with low crime. Closer to the northern U.S. border, issues with drug cartels, violent murder, and political intimidation and assassination are legion. Having never been there, what can be said for sure is Mexico is a large and diverse country, not unlike the U.S. or any other large country. What happens in one part doesn’t represent the entire country, any more than Detroit or New York, are what the United States are like nationwide.
Mexican Economy
Another thing that can be safely ascertained is that the Mexican economy and finances could be better. It does not have a reputation of great strength or stability, dating back to it’s economic collapse and bailout by the U.S. at the end of 1994 into early 1995. Mexico was also badly hurt in the 2008 recession. And remittances (personal money transfers) are very popular from the U.S. to Mexico, so the southern neighbor should be fertile ground for a ground-breaking digital currency like Bitcoin to gain acceptance.
Luke Rudkowski of WeAreChange interviewed Jose Antonio Rodriguez, founder of the first Argentinian Bitcoin exchange UniSend. He also owns Altis, a Bitcoin education and empowerment arm in Mexico, and he is well-informed on the Bitcoin situation in Mexico. He became concerned and directly involved when the government started issuing Bitcoin warnings.
“When (the Mexican Government) issued a warning about Bitcoin last year, what I didn’t want to have happen is for what happened in Ecuador and Bolivia, where they started banning Bitcoin.”
Ecuador has gone to its new domestic electronic currency system, coinciding with the ban on Bitcoin since they don’t need the competition from the original digital currency.
Rodriguez made some contacts with the Head of Financial Payment Systems for Mexico and arranged meetings with him to help educate him on the opportunity Bitcoin provides people and the country at large.
“We had two meetings. After the first meeting, he said ‘It’s not going to get banned. There are not going to be any rules. We have bigger financial problems than Bitcoin! So there’s going to be no taxing; there are going to be no rules, nothing. Just make sure there is no organized crime or money laundering in your companies.”
Also read: Mexican Bitcoin Exchange meXBT Launches Trading Platform
It is estimated that actual use is very light overall, with just six known Bitcoin ATMs, and about three thousand active Bitcoin users, so there is plenty of room for growth in Mexico. Merchant acceptance is also isolated to tourist areas like Acapulco, but we have reported how Bitcoin has gained acceptance at 7-Eleven stores throughout Mexico. Also Pademobile grants Bitcoin access to millions by phone through an agreement with Mexican Bitcoin exchange Bitso. At least the government won’t say they aren’t afraid of it, and then ban it in practice through over-regulation and deliberately making it more inconvenient to use.
The current financial market conditions not just in Mexico, but also Argentina were pretty amazing, according to Rodriguez. This almost abusive system can lead to a major opening for Bitcoin to grow future lending services, once the mainstream starts to accept Bitcoin.
“You can get a credit card for 50-100% APR if you are low-income, up to 200% APR if you want to buy a TV. When I went to Argentina, interest rates are even higher! So if you can get that money through (Bitcoin) lending, that’s a great option (here).”
It seems that Mexico is open terrain for Bitcoin in many areas. Merchant services, education, remittances services, ATMs, lending/crowdfunding, and investment options are opportunities for growth. Maybe Mexico’s government will change their tune if things take off, but as of now, Mexico is your oyster if you are a Bitcoin entrepreneur. People like Jose Rodriguez are looking to provide an innovative service to an open market. That’s how fortunes are made.
Images provided by Wikimedia and Shutterstock.
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