In summary
- Trade between Asia and Latin America is undergoing a radical transformation driven by Blockchain technology.
- Stablecoins reduce the high costs of FX conversions and enable settlements in minutes with low fees, transforming how Latin American companies conduct business with Asia.
- Tokenization of real-world assets such as government bonds, infrastructure, and real estate can improve liquidity and attract international investors.
Trade between Asia and Latin America is undergoing a radical transformation driven by blockchain technology. In an interview with Decrypt during LaBitConf, Latin America’s largest annual Cryptocurrency conference held in Argentina, TruBit executives shared their perspectives on how international transfer costs have plummeted to historic levels and the role decentralized technologies can play in the financial future of the region.
“Stablecoins reduce the high spreads of FX conversions, and the use of blockchain allows settlements in minutes, with fees as low as 0.1 USD, compared to the high costs and slowness of SWIFT,” said Hongyi Tang, Country Manager of TruBit in Mexico. This dramatic reduction in costs and settlement times is fundamentally transforming how Latin American companies conduct business with Asia.
According to a recent report by the blockchain analysis company Chainalysis, the use of stablecoins in the country reached record figures due to high inflation.
Image: Chainalysis
According to the report, in general terms, stablecoins provide a more active market in LatAm than all other cryptocurrencies combined. This especially benefits companies in Latin America, where traditional banking systems have limitations. Tang also mentioned the potential of tokenizing real-world assets, such as government bonds, infrastructure and real estate, to improve liquidity and attract international investors.
“Government bonds across the region, which offer attractive yields, are ideal candidates for tokenization,” notes Tang. The opportunities extend beyond traditional financial instruments. “Infrastructure, real estate and agricultural products assets in LATAM countries show promise,” he adds, highlighting the growing interest of Asian investors in these markets.
According to Tang, one of the main technical challenges Trubit has faced has been adapting to the various local cryptocurrency regulations in each country. However, by working with local experts, the company has been able to implement solutions that comply with the applicable regulations in each market.
Argentina Stimulates Crypto Ecosystem
Matías Reyes, Country Manager of Trubit in Argentina, pointed out that the regulatory framework of said country, which he considers a pioneer in the region, is strongly promoting the blockchain ecosystem and the adoption of decentralized technologies. Regulated aspects include mandatory registration in the Registry of Virtual Asset Service Providers (PSAV), the adoption of strict anti-money laundering policies and the implementation of customer identity verification processes. All this without restricting the freedom of companies with unnecessary bureaucratic procedures.
“These measures have formalized the operation of virtual asset service providers under the supervision of regulators,” explained Reyes, “PSAVs regulated in Argentina offer great opportunities in the field of international payments and remittances, since cryptocurrencies allow “fast and economical transactions, overcoming the limitations of traditional banking systems.”
“These companies can offer remittance services at lower costs and with shorter processing times, which is beneficial for the population that depends on this income,” he stated.
Blockchain reaches the BRICS
Regarding initiatives such as BRICS Pay—a decentralized payment system proposed by the group of emerging countries known as BRICS to unify payment platforms between these countries, allowing instant transactions and in local currencies through a single mobile application—whose implementation is began evaluating last month, Tang believes they have the potential to facilitate more efficient and secure transactions between Asia and Latin America, reducing dependence on the US dollar.
“It’s not so much about when crypto usage will become mainstream, but rather how we can leverage this technology to generate value in Asia-LatAm trade,” Tang concluded. “Just as few care about the technical details behind SWIFT or SPEI, what is important is that these tools work efficiently and accessible, without the user having to worry about the technology itself.”
However, Tang assured that the success of BRICS Pay will depend on the adoption and trust of Latin American countries in this system.
Marco Tulio Lanz Díaz collaborated in the writing and preparation of this note
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