#004: What's happening with El Salvador's crypto experiment?
President Bukele's pet project is losing steam, but mainstream crypto is gaining momentum in Argentina and Brazil
Hey technopolists,
This week, it’s crypto, crypto, and more crypto. Banks, businesses, and bureaucrats are all getting involved.
Plus, we’ve seen yet another fintech mega-round, so we’re taking a look at the sector’s darlings here to get a sense of scale.
Let’s get into it.
What’s hot
🇨🇱 Chilean businesses get paid. Xepelin, the Santiago-based B2B payments fintech, raised $111mn in a Series B, with participation from heavyweights like PayPal ventures. The company’s SaaS offering provides payments infrastructure and real-time data feeds, on top of slick visuals, like a “virtual CFO”. The round, which Xepelin touts as the largest Series B in Chile (see chart below for more), comes hot on the heels of their July 2021 Series A. They plan to expand into Mexico with the new funds. (Christine Hall / TechCrunch, 398 words)
🇦🇷 Argentinian big bank approves crypto. Banco Galicia, the largest private bank in Argentina, has announced that its clients will be able to buy, sell, and hold four top cryptocurrencies directly through their online “home banking” service. This is the first and largest venture into crypto from a traditional bank in the region, and yet another brick in the wall of crypto conversion. The Argentinian central bank has responded heavily cautioning users about the risks involved. (Belen Escobar / Bloomberg Linea, 572 words - Spanish)
🇪🇸 Spanish crypto lands in LATAM. Bit2Me, the Spanish cryptocurrency exchange, has opened a new outpost in Brazil as they try to land and expand into LATAM. Bit2Me is no joke: with $1.2bn exchanged by clients in over 100 countries globally last year, it is recognised by the Bank of Spain as a digital currencies provider. It also claims to be the first cryptocurrency with direct integrations with traditional banking to “offramp” crypto into real assets. For the new launch, they’ve hired a local team of experts hailing from Binance, Mercado Bitcoin, and Itaú (Brazil’s largest bank). The competition for the Spaniards will be fierce, given the prevalence of Latin American incumbents like Mercado Bitcoin (nearly owned by Coinbase) and Bitso — not to mention any global players. But with 70% annual growth in Brazilian crypto volumes last year, they’re hoping the pie keeps growing. (Beatriz Anzar / El Espanol, 1,056 words - Spanish)
What’s not
🇸🇻 El Salvador’s crypto-wallet flop. Nearly two-thirds of Salvadorans have already abandoned the country’s government-subsidized digital wallet, Chivo, which launched in September of last year. President Nayib Bukele’s government wanted to spur Bitcoin adoption and reduce the $6bn paid in annual remittance fees by offering a $30 incentive for new signups to the app, which stores and transacts cryptocurrencies like Bitcoin, alongside fiat currencies. Over half of the country downloaded the app, but security issues, identity fraud, and software bugs have caused users to flee the app in droves. Most of those staying on Chivo are using it like a traditional bank with official currencies, not crypto. (Luke Taylor / Rest of World, 824 words)
🇧🇷 Brazil’s pro-investor bill gets dumped. In a vote last week, Brazil’s congress vetoed a bill that would allow investors to offset capital losses against capital gains on their tax returns. Critics argue that the decision — which goes against the grain of most global tax regimes — will hurt startups by slowing the pace of venture funding. Even though the news merely upholds the status quo, it comes as a disappointment to the startup community amidst the backdrop of a cooling global funding landscape and mass layoffs. The current rules hurt angel and early-stage investors the most, as they write the greatest number of cheques for startups that fail. (Gabriela del Carmen / Startups Brasil, 752 words - Portuguese )
Stat of the week
On the back of Xepelin’s $111mn mega-round, this week’s chart shows how their new raise compares with that of the biggest fintechs in LATAM:
Source: CB Insights via Latinometrics
For the culture
Diego Maradona is setting records from beyond the grave. This week, the shirt he wore while scoring the infamous ‘hand of God’ goal in the 1986 World Cup quarterfinal against England was auctioned off at Sotheby’s for $9.3mn. The jersey is officially the most expensive piece of sports memorabilia, smashing the record previously held by baseball legend Babe Ruth, whose Yankees jersey fetched $5.6mn in 2019. (Sandra Ramirez Ortega / Al Dia, 406 words)
Elias Torres, the Nicaraguan co-founder of US-based marketech unicorn Drift, is talking talent. As a Latin American co-founder in the states, he spoke with Rest of World about connecting the US and LATAM ecosystems. (Rest of World, 517 words)