Across The American Border, Mexico Is Quietly Making Big Moves Towards Blockchain Adoption
All over the world, blockchain is gaining popularity now. But what about Latin America, especially Mexico?
The Mexican Congress approved a bill and recognized cryptocurrencies not as a currency, but as digital assets, similar to the shares of companies for which they established rules to prevent money laundering and corruption. The Central Bank of Mexico is responsible for monitoring cryptocurrency companies.
Mexico was able to become one of the first countries in Latin America to regulate blockchain and cryptocurrencies. At the state level, the ubiquitous distribution of blockchain technology is taking place and for ordinary citizens this could not go unnoticed.
First Blockchain Association in Mexico
The Blockchain Association of Mexico was established companies Bitso, Volabit, BIVA, GBM, Lvna Capital, ConsenSys and Exponent Capital. The organization’s objective is to educate citizens in the technology’s deployment and its potential applications.
- Bitso – It is one of the first cryptocurrency exchanges founded in 2014 in Mexico. Bitso offers users and developers a user-friendly interface, instant transfers and MXN exchange, and API support for creating their own applications.
- Lvna Capital is a crypto hedge based in Mexico, aimed at seeking value in the blockchain ecosystem.
- ConsenSys Academy in Mexico is aimed at educating citizens on the blockchain technology by providing them the professional training from experienced blockchain trainers.
- Volabit is a cryptocurrency trading platform in Mexico which allows users to buy and sell the amount with a click of the button. The platform charges only 0.8% for every buying and selling of cryptocurrencies.
- Exponent Capital is the first cryptocurrency investment firm in Mexico which believes that the decentralized model can eliminate the intermediaries from the financial system. They are contributing to the development of the financial system with blockchain technology.
- GBM – Incorporated in 1992, GBM is a controlling entity of financial activities in Mexico. Having its subsidiaries in Mexico, the United States, Brazil and Chile, the organization has been able to position itself as a business group with some of the reputed financial entities for international and national investment.
- BIVA is the second stock exchange in Mexico which is aimed at contributing to the growth of the stock exchange through latest technologies.
Also, among other projects launched by the Mexican government, there were several interesting projects that are currently still under development or were cancelled because of COVID-19.
The main problems that blockchain can solve in LATAM
Corruption is considered a social plague not only in Mexico, but throughout Latin America. This is an acute political problem that needs to be addressed. Mexico, one of the richest countries in the oil sector, is a country with high levels of population migration, theft and homicide. Corruption has swelled to unprecedented proportions, for example Pemex, the largest oil and gas company based in Mexico, published a report in 2018 that cited a staggering $ 1.6 billion as the amount they lost annually to fuel thefts.
In the 2019 Transparency International Corruption Perceptions Index, the country was ranked 130th out of 180 countries.
The problem with the transparency of elections in Latin America is very acute. In a number of countries, fraud elections is on an unprecedented scale. Unfortunately, the use of the current election mechanisms allows the ruling party and the president to use their influence to falsify the voting results. Blockchain should solve this problem. Nowadays, many blockchains are struggling with this problem and they are close to solve it.
Mexico’s population is growing at 1.4 percent annually, which has remained unchanged since 2000. But over the past ten years, some areas have seen a decline in population growth. Due to the lack of documents, people have to become political and economic migrants. With a global digital identity, refugees can become the owners of their identity, and a blockchain-based payment system can help displaced people transfer money without a banking system.
Blockchains that can help solve these problems
Ethereum – One of the famous projects launched by Vitalik Buterin. Initially, it was created not so much as a payment system, but as a base for the affordable implementation of blockchain technology in third-party projects and startups. Simple code, fast integration and a lot of educational information helped the project to firmly take the second place in the world after Bitcoin. It is actively used by developers Microsoft, IBM, Lufthansa airlines, etc.
Certainly one of the most affordable options for engaging developers from Latin America and the government
Binance Chain – Was created as the “killer” of Ethereum. launched in September 2020, is a blockchain service that allows developers to create their own decentralized applications using smart contracts. The original Binance chain was not able to provide this functionality, but the Binance Smart Chain was designed to provide the same fast transactions, as well as significantly expand the available features and capabilities. It is also compatible with the Ethereum Virtual Machine (EVM), which means it is capable of running dapps ported from Ethereum. By this he justifies his name “the killer of Ether”.
Now Binance is actively developing in the Latin market and of course, due to the expensive transactions of Ethereum, it can become its serious competitor in this market.
Free TON – In May 2020, Pavel Durov announced that Telegram was officially abandoning the TON project, and made all underlying TON code open source for anyone to use as they wish. As the Gram lawsuits in the United States continued for a fairly long period of time, programmers and project development partners that collaborated on the TON project foresaw this outcome. After Pavel Durov’s official renunciation of the project, a group of TON developers and development partners picked up an almost finished open source TON code and launched their own blockchain platform, which was called Free TON, and cryptocurrency token TON Crystal. Free TON is a project with decentralized framework when it comes to the project’s technical development and management. Free TON de facto has no CEO and managed by the community via a system of proposals and contests.
In the fact that the project is only one year old, it has already managed to gain distribution among blockchain developers and hold a g designed to help Latin America with transparency of elections.
Blockchain Opportunities in Mexico
Despite the backing of the government and regulatory laws in Mexico, there is an acute shortage of experienced workforce – one of the main problems preventing Mexico from becoming a leader in the blockchain space.
Innovation Evangelist for TCS Latin America, Arun Ramachandran said:
“There are very capable people in Mexico, but most are moving to the US. We want to reverse the tide by giving them the opportunities to grow their knowledge of blockchain at home, taking the technologically versatile people and training them to fully understand how blockchains work.”
We are only at the beginning of the technological path and it is expected that technology start-ups will be able to make a huge contribution to the development of not only Mexico but also all countries of Latin America.
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