New Bitcoin Foundation Chapter is Sign of Bitcoin's Bright Future in Mexico

CoinDesk speaks to members of Mexico's bitcoin community for a detailed look at its domestic growth prospects.

AccessTimeIconApr 29, 2014 at 6:40 p.m. UTC
Updated Apr 10, 2024 at 3:01 a.m. UTC

The Bitcoin Foundation added its latest affiliate chapter this week when it announced that Mexico's Fundación Satoshi Nakamoto had officially gained accreditation.

The decision comes at a time when the Bitcoin Foundation is looking to further its International Affiliate Program, and notably follows the appointment of the first two affiliate chapters - Bitcoin Foundation Canada and the Bitcoin Association of Australia - in December 2013.

While a boon for the Bitcoin Foundation, the move can also be seen as a validation of the work being done to grow Mexico's bitcoin ecosystem, which local sources say has succeeded in creating a greater awareness of bitcoin and its benefits among consumers, media outlets and regulators.

Founded by employees of mobile money services provider Pademobile, Fundación Satoshi Nakamoto grew out of efforts of Pademobile founder and CEO, and Fundación Satoshi Nakamoto president, Raul Nogales to learn more about the benefits of the technology.

Lucia Cangas, who is the marketing and communications director for both organisations, explained that in conducting research about bitcoin for the Pademobile platform, she and Nogales were able to find key players in the local ecosystem for their new bitcoin-focused organisation.

Now that it has gained international recognition, Cangas told CoinDesk that the group plans to expand its efforts to fight what she called the "negative connotation" that has so far dogged bitcoin in Mexico's mainstream press.

Cangas said:

"We want to start working with the government and financial institutions to get more knowledge in Mexico and stop the fear surrounding bitcoin. That starts by getting involved so people start getting real information."

In interviews with CoinDesk, members of the Mexican bitcoin community expressed enthusiasm for the decision.

Further, they also provided a big-picture look at how consumers and state decision-makers have become more aware of the technology, and how, due to the needs of local consumers in certain key markets, Mexico could prove to be fertile ground for the technology's long-term development.

Mexico comes from behind

Though Mexico has seen a rush of new businesses and interest groups, much of these developments have happened rather recently.

Pablo Gonzalez CEO and director general at Mexico-based bitcoin exchange Bitso, described the state of the industry one year ago to CoinDesk, stating:

"The Mexican bitcoin community was extremely small and quiet a year ago, especially when you compare it with the likes of Canada and Argentina. Mexico was behind in bitcoin adoption."

By comparison, Tomas Alvarez, CEO of Mexico-based bitcoin remittance startup Coincove, illustrated what Mexico's local ecosystem looks like today.

A Mexican citizen and domestic bitcoin business operator, Alvarez indicated that over the last six months he has watched the ecosystem change drastically.

Alvarez said:

"Six months ago, there was almost nothing happening in the bitcoin scene, now there are regular meetups taking place in the main cities, bitcoin services popping up on a regular basis and, most importantly, bitcoin is being mentioned in schools and offices."

Cangas indicated that bitcoin is even starting to get positive press coverage, following a spree of bad news related to defunct Japan-based bitcoin exchange Mt. Gox.

In the last month, she said that stories related to the businesses that are working with bitcoin and merchants that accept bitcoin have been more widely disseminated.

Regulators take notice

This increase in awareness has also translated to a greater interest from national regulators.

Bank of Mexico, the country's central bank, notably released its initial guidance for digital currency businesses in March, when it announced that its major banks would be restricted from conducting operations in digital currency.

That has not been the bank's last word on the matter, however. Sources say it has since held meetings with local industry luminaries to further explore the topic.

Despite the initial negative tone, Alvarez says that his experience with national regulators has been positive, stating "I find their attitude towards Bitcoin to be extremely positive and constructive". According to Alvarez, members of the local bitcoin ecosystem have been discussing how bitcoin should be regulated domestically with the central bank.

For example, while the central bank has ruled that bitcoin is a ditigal asset, not a currency, it has encouraged local businesses to abide by anti-money laundering (AML) laws, though Alvarez says they do not legally need to do so.

Gonzalez indicated that he has noticed an uptick in interest in his own talks:

"During our calls with the officials and regulators it has been clear that they have been closely studying the subject."

Room for growth

Members of Mexico's bitcoin ecosystem also spoke about what they see as the key areas for the expansion of the North American country's market in the next three to five years.

Gonzalez was optimistic that consumer wallet adoption will 'explode', and he expects this to happen within the next six to eight months.

This in turn, he says, will fuel the growth of supporting infrastructure.

"Shortly afterwards, we will see mass-market remittance efforts using Bitcoin and Ripple in existent physical locations. Mobile payments and affordable cold storage will then come into the play to aid the unbanked. These are the most obvious ones."

Gonzalez went on to say he hopes to see improvements in security, accessibility and non-currency blockchain applications in the near future as well.

Perhaps, unsurprisingly, Alvarez sees the biggest growth coming from a sector in which he's currently operating: remittances, though Congas also agrees. World Bank data suggests Mexico's global migrant workers sent home $22bn in 2013.

Of course, pursuant to the goals of Fundación Satoshi Nakamoto, Congas sees bitcoin as part of a broader effort to increase overall financial inclusion in Mexico:

"Bitcoin can help people [to] start using more financial services, interact more with financial products [and provide] another way to get people to start using those services."

Mexican Senate building via Shutterstock


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