LATAM Crypto Roundup: ICP Pilots Bitcoin Payments in Mexico, Paraguayan Miners Move to Brazil, and More

BeInCrypto comprehensive Latam Crypto Roundup brings Latin America’s most important news and trends. With reporters in Brazil, Mexico, Argentina, and more, we cover the latest updates and insights from the region’s crypto scene.

This week’s roundup includes stories on Internet Computer’s Bitcoin payments pilot in Mexico, Paraguayan miners migration to Brazil, Outlier Ventures’ Web3 accelerator in Latam, and more.

Internet Computer and DitoBanx to Pilot Bitcoin Payments at Mexico Universities

Internet Computer (ICP) Hub Mexico and DitoBanx, a bank from El Salvador, have partnered to test Chain-Key Bitcoin (CKBTC) payments at universities in Aguascalientes, Mexico.

CKBTC is a unique version of Bitcoin. It does not rely on traditional chain-key cryptography but instead uses ICP smart contracts to contain raw Bitcoin. As a result, CKBTC transactions are completed in just one to two seconds.

DitoBanx announced that 4,000 students will each receive 100 pesos worth of CKBTC (valued at $58.5). These funds can be used at various university merchants, including cafeterias, copy shops, and restaurants. This initiative aims to explore accessible financial alternatives for students.

“Collaboration is key. We want all of Latin America to advance in innovation and technology, so partnerships are vital. We welcome @Ditobanx; this is just the beginning,” stated ICP Hub Mexico.

Read more: Internet Computer (ICP) Coin Explainer for Beginners

ICP Camp in Aguascalientes, Mexico. Source: X/Twitter

ICP Hub Mexico and DitoBanx plan to expand this pilot program to more universities in central Mexico and Mexico City. Their goal is to promote the everyday use of Bitcoin as a digital asset and a tool for financial inclusion.

Additionally, ICP Hub Mexico announced a Hidrotech Hackathon on social media. This event will involve more than six universities from Aguascalientes, with DitoBanx also participating.

Colombia’s Central Bank Rules Out CBDC Creation Due to Operational Risks

Banco de la República, Colombia’s central bank, has decided against creating a central bank digital currency (CBDC), citing operational and reputational risks. The bank’s recent analysis indicates no significant use cases that justify issuing a wholesale digital currency.

The central bank’s study concluded that CBDC poses risks without offering clear benefits. It remains uncertain whether a CBDC would enhance the efficiency of immediate payments in Colombia. Consequently, Banco de la República has ruled out issuing a retail or wholesale CBDC.

“For now, there are not sufficient reasons for the issuance of an CDBC (retail or wholesale) in Colombia. Any potential issuance will require careful study of regulatory requirements, along with legal adjustments to make it legal tender,” stated Banco de la República.

Read more: Crypto vs. Banking: Which Is a Smarter Choice?

Despite ruling out a CBDC, the central bank will continue to study digital currencies and their potential impact on the economy. It aims to assess trends, improve market failures in electronic payment services, and experiment with Distributed Ledger Technology (DLT) and other controls to evaluate potential CBDC benefits.

In late 2023, the Colombian Ministry of Finance, under the previous government of Gustavo Petro, confirmed it was working on a bill to regulate cryptocurrencies.

Outlier Ventures and Morgan Creek Digital Launch Web3 Accelerator in LATAM

Outlier Ventures, a global Web3 accelerator, has partnered with Morgan Creek Digital to launch their first accelerator program in the Latin American region. Morgan Creek Digital will provide selected teams with capital investments of up to $200,000 and mentorship throughout the 12-week virtual program, starting in September. The program will be conducted in English, with support in Spanish and Portuguese.

The LATAM Base Camp accelerator aims to support top Web3 startups in the region. Applications open today, targeting startups developing innovative technological and financial solutions across Latin America.

“We are thrilled to launch our first accelerator program in LATAM with Morgan Creek Digital. The region is teeming with entrepreneurial spirit and innovation. We are excited to support and scale the next generation of Web3 tech leaders. With Morgan Creek Digital as our partner, we are confident this will be a huge success,” said Benjamin Meyer, Chief Growth Officer at Outlier Ventures.

Read more: Top Blockchain Companies in 2024

The accelerator program will provide selected startups with tailored mentorship from industry experts and networking opportunities with investors. Outlier Ventures’ in-house team will support the teams with their product roadmap, community building, entity structuring, and strategic guidance to navigate the complexities of scaling a business in the Web3 industry.

“We are thrilled to partner with Outlier Ventures for their first LATAM Base Camp Accelerator. As the Web3 startup ecosystem in LATAM continues to evolve rapidly, we look forward to supporting the cohort throughout their journey,” added Mark Yusko, Managing Partner of Morgan Creek Digital.

Brazil and El Salvador Seek to Strengthen Parliamentary Ties

Deputy Rodrigo Valadares (UNIÃO-GO) has proposed creating a Parliamentary Group to strengthen relations between Brazilian and Salvadoran parliamentarians. The initiative aims to “encourage and develop relations between the countries and cooperate for greater exchange between their legislative powers.”

Valadares highlighted El Salvador’s growing international recognition in tourism and financial technology, notably as the first country to adopt cryptocurrencies as legal tender. He also noted Brazil’s existing trade relations with El Salvador, which include R$137 million in exports. This figure is expected to rise with new health licenses approved by the Salvadoran government, enabling Brazil to export eggs, gelatin, animal collagen, and poultry meat to El Salvador.

Members of Congress who join the Parliamentary Group will have opportunities to engage through various means, including “congresses, seminars, symposia, debates, conferences, studies, and meetings of a political, legal, social, technological, scientific, environmental, cultural, educational, economic, and financial nature,” among others.

Read more: Crypto Regulation: What Are the Benefits and Drawbacks?

The proposal comes as El Salvador seeks closer ties with Latin America. In late 2023, Bitcoin advocate Max Keiser, an advisor to El Salvador on cryptocurrencies, proposed sending a diplomatic mission to Argentina. The mission aimed to discuss El Salvador’s successes with Bitcoin and explore similar opportunities for Argentina with the newly elected president, Javier Milei.

However, the likelihood of Brazil adopting a similar cryptocurrency policy is very low. It remains to be seen whether Salvadoran parliamentarians would engage with the entire Brazilian Congress or primarily with opposition members.

Paraguayan Bitcoin Miners Move to Brazil After Electricity Tariff Hikes

The Paraguayan Chamber of Mining of Digital Assets (Capamad) has warned that many Bitcoin mining companies are relocating to Brazil due to recent electricity tariff increases in Paraguay. The new tariffs, implemented by the National Electricity Administration (ANDE), have increased rates for large cryptocurrency mining companies by 9 to 16 percent. This move aims to curb losses from illegal mining, which cost Paraguay over $185,000.

Capamad director Jimmy Kim noted that cryptocurrency mining companies no longer see Paraguay as a viable location for their operations. Instead, they are looking to Brazil, where the conditions are more favorable. Penguin Group, a mining company, has already secured a 400-megawatt contract with Brazil, with plans for an additional 400 megawatts underway.

“400 MW secured on excellent terms in Brazil! And another 400 MW are on the way! Penguin Infrastructure Brazil is already a reality!” said Penguin Group co-founder Björn Schmidtke.

Read more: Is Crypto Mining Profitable in 2024?

Capamad criticized the lack of coordination with ANDE and expressed hope that electricity rates would eventually return to previous levels. They are pushing for discussions to resolve the issue.

According to the ABC newspaper, monthly electricity rates in Itaipu, Paraguay, increased from 16.71 to 19.28 kW. Large mining consumers had already been paying 20.75 kW per month before the hike. Kim highlighted the volatility of the rates, suggesting that future increases were anticipated.

As the Latam crypto scene grows, these stories highlight the region’s increasing influence in the global market. Stay tuned for more updates and insights in next week’s roundup.