 in American directions, I'm Nicholas Susman. And today we have our guest, Mateo Vermeo, to discuss cryptocurrencies in Latin America. Mateo is an innovative solution seeker with a background in law, passionate about defining and reshaping businesses to unlock the potential of emerging markets by using crypto, finance, and technology. Mateo now works as business operation manager for reserve in Columbia and Mexico, a global project with the aims to scale prosperity through a digital currency and also beats global digital finance, Latin American chapter, the leading global members association advocating and accelerating the adoption of best practices for digital assets. Mateo, it's a pleasure to have you here. And the first question I think for the audience is, what is crypto and why crypto? Why don't we stay with our regular currencies? Well, first off, thank you for having me here and a big hello to audience in Hawaii. It's a pleasure to be here. So basically, that's a hard question, but I'll say that my easy answer will be to, cryptocurrencies were created to eliminate the middleman in transactions. That's what is stated in the Bitcoin white paper by Satoshi Nakamoto. And that's the reason why cryptocurrencies were created. They were created to simplify the financial system that was simply difficult for the usual person to engage with that was no player in any way. And that it was especially difficult to manage because there was no overseer. This was a cryptocurrencies were born right after the 2008 crisis in which we were led by financial greed in many ways. So I think that cryptocurrencies came in the picture to solve the issue of the middleman and only having to rely with banks and central banks. And that's why cryptocurrency was born. Right now we see the applications of cryptocurrency in a much more broader way. We see applications in art, we see applications in real estate, we see applications in gaming, and we are not limited to cryptocurrencies. And that's why crypto is a whole new world that I think needs to be addressed in a lot of ways. Right, and we've seen crypto go from skepticism at the beginning and now gaining more support even with platforms such as PayPal opening the option to trade cryptocurrencies in the U.S. at least. How has been the situation in Latin America? Well, it's been hard. I think that let's start from Colombia where we are based right now. And afterwards we can see a different panorama and the scenario in different countries of the region. We were to see how crypto adoption has been evolving. At first it wasn't even a skepticism that was in the region. It was an outright prohibition and it was seen to be used by bad actors in the ecosystem. Simply terrorists or something of the sort, you know. At first, of course, once you understand that anybody can use any type of asset in any way, whatsoever. We can use an eye to use in the kitchen or we can use an eye to commit a crime. The knife has no problem in that sense. It's simply how you use it the clock. And that's why right now I think that with the recent executive order in the U.S., we are seeing a panorama and a change in the landscape of what we are having as regulations in every country in the region. Even today, we saw the Brazilian government and the Brazilian Senate promoting a Bitcoin law in order to enforce cryptocurrencies, cryptocurrency regulation in the country. The executive order by President Biden created a system that was simply to set order in all of the agencies in the region, in the U.S. in order to have cryptocurrencies to have regulated the cryptocurrency space in the U.S. What we have in Colombia is a space that is now developing. I think that there is a lot of things going on with our financial entities and the financial agencies as well to promote the correct regulation of cryptocurrencies. And I think that this is what we're seeing in a lot of countries. Argentina, Chile, Mexico, they are really open to cryptocurrency regulation. But what we see right now is, I think, that an environment that promotes creativity and it does not turn great creativity. And I think that is what we are needed for our regulators and our politicians to understand that this is a technology that needs intelligent regulation. And I think that that's the path that we're standing for. Okay, let's go a bit into that, right? Because at least from my perspective on what I understand from you is that the key with crypto, at least at the beginning, was having no regulation, right? And now we're going back again into regulation. So let's speak about why regulating, we're not regulating crypto and then how much regulating crypto? I think that at first, and you can see the honor cast in me in a way is that we wanted this to be a space without any kind of regulation simply like laissez-faire and simply for the people, by the people and with the people. Right now, as we see the space growing in value and we see this space growing in adoption, I think that it's pretty intelligent for us to promote intelligent regulation that promotes an ecosystem that allows for our organizations to thrive. However, what I mean by intelligent regulation is not aborting some executive orders or aborting some agency that oversees everything that we are doing and every step of the way. I think that there is some mixture in what we need and what is right now in the system. Because if you were to regulate us as the legacy financial systems, we are not gonna be able to comply in many ways because technology, as you know, goes even faster than law, much more faster than law, much more. So that's why we need regulation that simply oversees the technology, but that's not limited. So what we do as Global Data Finance in Latin America is to promote overaking principles in order for them not to be obsolete once the technology changes. Because if you regulate technology, as soon as technology changes, the regulation will be obsolete. And as you know, technology goes really, really fast. And if you were to regulate cryptocurrencies in 2016, it will be a very different ecosystem than what we have right now with NFTs and with the metaverse and with everything that's going on. So that's why what we have right now and what we need right now are to create principles that are to be applied by all the players in the ecosystem and that we as an organization promote and that we think are the best thing to move forward. And I think that that will be the very best way to do it. Because as I'm telling you, I think that if you create a stale law, it will be easily, easily outdated because as you know, five years ago, crypto space was one thing, and right now we're in another thing. And I think in 10 years, we're going to see a whole different universe or even a metaverse in 10 years. Right, right. You speak about intelligence regulation, right? And about some principles. So please explain this a bit why, what are the governments trying to regulate, right? What are they trying to prevent and show us how those principles perhaps comply with that objectives. Sure. So basically the main concern of governments when you start talking about cryptocurrency is anti-mono laundering and tourist financing. Like that's the number one issue that every government goes for. And right now what we promote is that there are a lot of different ways to go about AML and KYC and understanding your customer, understanding transactions and overseeing the space. However, blockchain has the magnificent thing that is the only way that you can track every single transaction that occurs to the blockchain, you can see it. And it's really, really, really easy to do it once you go and have the right tools. There are several different ways to explore a blockchain network in order to see all the transactions that happen in this network. And that's why I think that the governments are understanding that they actually will be able to regulate this in a way that they can oversee transactions. And that's why we are seeing the promotion of central bank data currencies. And I think that that's one way to do it. However, I think that if you go back and if you try to understand why they're trying to regulate, because they're afraid. That this may be used by bad actors. They're afraid that this may be used by people that are, of course, trying to perhaps loan their money as they use and they have been used in the banks for several years. And I think they're trying to promote the same type of regulation. However, I think that our principles, what we are trying to promote, is simply that you cannot apply the same ideas, let's say the travel rule, that you can apply for a wide transfer to a cryptocurrency transaction. Why? Because there are many different components in a cryptocurrency transaction from one person to another. And if that person is an exchange, or if that person is a natural person, that I'm sending money, let's say to you, the transaction is different, but it is overseable. And I think that the governments will need to understand how they need to apply the principles of KYC, AML, Anti-Tourism Financing to the new technologies. And I think that what we are seeing in several regulations such as Singapore, Hong Kong, Malta, even in El Salvador, we are seeing an understanding of these new technologies and they trying to create over-aikin principles that do not become stale and that they put the burden on the companies. And that's the good thing to do because I think that companies want to be self-regulated, companies want to definitely apply on all the principles to comply with every single element that the government requires. But I think that you need to understand that at the same time, this is a business that needs to work. And if you board on the business with a lot of regulation, well, simply the bad actors are gonna profit from this opportunity. Right. Now, let's speak about the advantages of crypto. I get the advantages for people, right? People who are investing or dealing with crypto have seen a significant increase in their profits that I get. But let's speak about advantages for the economy and for the big picture of crypto. I think that there are many advantages. If you were to ask me, one of the most important one is the opportunity to have the first sovereign capital or the first sovereign asset in the history of our world. Like, right now, before the creation of Bitcoin, we were not able to have a cryptocurrency that was not, let's say, over-seed and controlled by the state. And I think that right now with Bitcoin and the several other cryptocurrency that has had followed, especially with Bitcoin, we have the opportunity to have sovereign assets that do not depend on the government's activities for good or for bad. Because if you see the good actors, let's say, first government, you see the Swiss franc as a stable currency that you can rely on and save value on that price. However, the cases of Zimbabwe, Venezuela, Argentina show the other side of this coin that if you depend on your savings and your hard work in a government, and if this government doesn't have your best interest in mind, you are not able to defend the value of all the work that you have created and of all the work that you have done in your life. And this is what has happened to the people in Venezuela, Argentina, Zimbabwe. What is happening right now in the United States with record high inflation right now is that exact same thing, is that the government is not always having your best interest in mind. And that's why that cryptocurrencies allow the people to have a sovereign asset that does not rely and does not need the authorization of the government to exist. And I think that's a very important thing to understand. That Bitcoin is inflationary right now that we just discussed in an economic point of view. However, what I think is that you allow for the people, for the first time in the financial history of the world to have an asset that it's actually not even depending on a country. A Bitcoin is a Bitcoin. You can take it from Colombia to the US, from the US to Hong Kong, from Hong Kong to Australia and from Australia to any world in the world. And all of this without the overseeing entities that need to control or were controlling the money before. I think that's really interesting to see because right now we're seeing a change in the paradigms and in everything that exists right now as individuals. And I think that we're taking a little bit of power away from the government. And that's why they're scared. And that's why I think that's the most valuable thing I would give to politicians. Right, I get that. And again, I see how this works in the benefit of the people, right? And I maybe I'm going to pick your brain a bit, talking about perhaps redistribution, right? So there's a lot of people making good money with crypto, which is perfectly fine. How do those benefits that these people are getting from their profits reflect in more development, better quality of life where other people and so on, how this economic activity coming from crypto has an impact on the rest of the society with people who are not doing crypto, for example? I think that one easy way to do it is let me talk about my job at reserve. At reserve what we aim to do is to give the people of the world a currency that allows for safer storage of value. And I think that our main case right now, and we are the main cryptocurrency being used in Venezuela, is it's RSV being used in the country for business transactions for supermarket transactions. Simply go into a store and buy whatever you want with the money that your son or your daughter has sent you via cryptocurrency and that you are allowed to use it. Let's say in a way to convening the limits of the government that a government has imposed on you. I think that is something that before, if we thought about this before, this was magic. And right now, I think that's what we are seeing. We're seeing the capabilities of cryptocurrency to allow for the change of life of people in a lot of countries, not only in the transaction on a daily basis, but people that were actually affected by hyperinflation in several countries were able to safeguard their assets, might have them in cryptocurrency. The recent case of Ukraine and the affected people of the country, they were able to save their money and travel safely abroad and seek refuge in Poland or all the countries because they had cryptocurrency and they did not depend on the banks to be able to take their assets from one place to another. And I think that's how you see the actual use of cryptocurrency in the world. Of course, there are a lot of camp coins, there are a lot of different projects that simply promote their team to become rich. And I think that's something that happens in every single sector of the economy that simply are people doing it for their own profit. But I do think that most of the projects in the cryptocurrency and in the crypto space, not only cryptocurrency, but in the crypto space are trying to promote a more egalitarian way to access financial services. Let's speak about the other way around. Let's speak of the Colombian side of the business or simply if you were Colombian, you were unable to access the financial markets besides Colombia. Right now you can actually become a member of different real estate ventures. You can invest in companies. You can own a part of a company or simply stake a token and get rewards in a different country, in a different state and right now without any need of traveling, without any need to go ahead and open an account in a foreign country. And I think that's the real change that we're seeing. We're seeing a real distribution and an openness of what we are having in the world. Right now the defined beforehand, the financial industry was limited to individuals with a certain network from certain countries. And right now we are seeing that change radically. And I think that's key. That's very interesting what they have. And we already discussed like the differences in regulation, right, at the governmental level. Let's speak about the use of people of cryptocurrency. Is it similar in Latin America as people use it in the US? Is there more people? Is there less people? Why are there less people who are less and so on? Yes, of course. Well, Venezuela is the first country in Latin America per capita. If you were to see it, they use this cryptocurrency. And I think that's simply understood if you see the government for station and the closeness of the economy. And that's why once you understand the power of cryptocurrency, the next governments, the next best cases, you understand simply like Argentina, hyperinflation country for the last 20 years, people are using massively. Brazil, there is an overcharge if you were to spend your money from Brazil in other countries. And that's why people send money abroad by using cryptocurrencies. The same thing with Peru, Ecuador, and even the case of El Salvador, when people send 5 billion a year remittance country and people are sending cryptocurrencies to circumvent the usual financial actors that take 10% of this $5 billion industry in El Salvador and distributed to the people. And I think that's what we're seeing. We're seeing a frictionless environment in which people can send money one to another without an intermediary in the middle. And that allows for a better ecosystem with a lot less friction and a lot less fees. And once you see this in a way, this promotes a huge growth in the economy. We see it in El Salvador, we are seeing it right now in Honduras, we see it in Colombia, we see it in Venezuela. And I think that as a whole world, once you understand the power of cryptocurrencies to eliminate the borders on the limits that were before established by money and by currencies, I think that you understand the real power of what we're building in the cryptocurrencies. Right. So you said this enables access to the financial services for regular people. Does it also help to close the gap between the global north and the global south? Definitely, definitely. So once again, let me get to the case of Colombia. We have a huge amount of refugees right now in Colombia from Venezuela. They arrived in Colombia almost two million people and to open a bank account for them was really, really hard because there are a lot of difficulties. Banks don't want to open a bank account to Venezuelan people. They had to rely on cryptocurrencies because there was no limit to what they could do. And they were able to open an account which is a virtual wallet in which they have their assets. And they were able to really transfer them to the family in Venezuela or receive money from their folks all the way. And that's really, really key. And I think that's how you are actually being able to eliminate the, let's say, the easiness that people in the global north have. And right now, we allow anyone in the world to access all the financial services that were before prohibited to them. Right. But there's one final remark from you. You said you're passionate about innovation, right? Let's speak about, as a final statement about the relationship between crypto and innovation, how crypto supports innovation as a final message. I think that there has never been a better space that promotes creativity and innovation than crypto. Why? Because I think that the rules are not set. And I think that all industries are now taking cues from the crypto space in which we are thinkers and people with open minds in order to contribute different and really game-changing solutions to actual problems in the world. We are not seeking a million high dollar valuations because that's not the objective of crypto. Crypto is actually creating a different economy for different people. And I think that is what promotes a radical different approach in creativity and innovation. And I think that before Mr. Satoshi Nakamoto, whatever he was, no more words, maybe I think that he opened the pockets for this to become a real game changer. And I think that we haven't even seen the tip of the iceberg right now in what we are gonna see for the next year to come. Thank you very much, Mateo. Everyone, this was Latin American directions. Mateo Vermeo and see each other in two weeks. Thank you very much. Thank you so much for watching Think Tech Hawaii. If you like what we do, please like us and click the subscribe button on YouTube and the follow button on Vimeo. You can also follow us on Facebook, Instagram, Twitter and LinkedIn and donate to us at thinktechhawaii.com. Mahalo.