Bankless - How Crypto Is Transforming Argentina's Economy

Episode Date: August 29, 2024

Today we're diving into the vibrant crypto ecosystem of Argentina as experienced at Aleph, a unique crypto pop-up city in Buenos Aires. You’ll hear from three influential guests - Marcelo Cavazzoli of Lemon Cash, Federico Ogue of Buenbit, and Manuel Beaudroit of Belo - who are leading the charge in Argentina’s crypto revolution.  The episode provides deep insights into why Argentina is becoming a global hub for crypto adoption, driven by grassroots enthusiasm and supported by the pro-crypto stance of the new government. Expect a blend of personal stories, expert opinions, and an exploration of how crypto is empowering millions in Argentina amidst the failing Argentine Peso. ------ 📣SPOTIFY PREMIUM RSS FEED | USE CODE: SPOTIFY24  https://bankless.cc/spotify-premium  ------ BANKLESS SPONSOR TOOLS: 🐙KRAKEN | MOST-TRUSTED CRYPTO EXCHANGE https://k.xyz/bankless-pod-q2    ⁠ 🦄UNISWAP | BROWSER EXTENSION https://bankless.cc/uniswap  ⚖️ ARBITRUM | SCALING ETHEREUM ⁠https://bankless.cc/Arbitrum  🛞MANTLE | MODULAR LAYER 2 NETWORK https://bankless.cc/Mantle    🌐 OBOL | STAKE ON DVs, SCALE ETHEREUM https://bankless.cc/obol  🗣️TOKU | CRYPTO EMPLOYMENT  https://bankless.cc/toku  ------ TIMESTAMPS  00:00:00 Start 00:16:37 Intro and Market Size 00:26:49 Demographics 00:30:29 Why isn't everyone using stablecoins? 00:37:14 Custody and Trust 00:42:29 Creating Crypto Power Users 00:49:08 Preferred Way Of Growing Wealth 00:55:28 Dealing With Competition 01:03:10 Building Under the Argentine Laws 01:12:21 Javier Milei 01:18:12 Crypto's Future In Argentina ------ RESOURCES Marcelo Cavazzoli - https://x.com/lemoncheli  Federico Ogue - https://x.com/fedeogue  Manuel Beaudroit - https://x.com/mbeaudroit  ------ Not financial or tax advice. See our investment disclosures here: https://www.bankless.com/disclosures⁠

Dear Bankless Nation, for the month of August, I've been in Argentina attending Aleph, the crypto pop-up city in the heart of Buenos Aires. One part Zuzalo, one part DevConnect. The goal of Aleph is to give the crypto industry here in Argentina, which is already very strong, a shot in the arm, in order to formally lock it in as a part of the Argentine economy. With Javier Malay's election last December, there is a unique window of opportunity that crypto has in Argentina. Argentina is one of the few countries with strong bottom-up support, and now it has an administration. who is deeply crypto in spirit. AILF is trying to seize the opportunity that the Mille administration

has presented to the crypto industry and formerly lock in pro-crypto regulation along with crypto support for the industries and startups that are present here in Argentina. At the AILF hub, a 1,000-person co-working space, crypto startups, venture capitalists,

and the Argentine government have all met and mingled for a month of collaboration, support, and growth. While AILF is just a one-month event that will eventually come to an end, the sparks it ignites will hopefully spread into a wildfire across the country of Argentina and then all of the Latam. This wildfire is what we call krasimiento or growth in the crypto vernacular of

Argentina. But why Argentina? Argentina is the spearhead of crypto. While developed nation venture capitalists and crypto Twitter hypothesized about use cases and adoption and attracting retail investors, in Argentina, crypto has already been adopted by millions of people who have a present and urgent need for crypto's value and services. Argentina is the perfect breeding ground for the crypto economy. The intersection of easy internet access, currency inflation, capital controls, and traditional business frictions have produced an environment in which the power of crypto can truly shine.

This recent Gwort tweet made me chuckle, but the irony here is that in Argentina, millions of well-adjusted adults with nine to five jobs with monthly expenses and obligations have all found crypto to enable them to live their lives better and easier. than the status quo. This satirical Gwart treat reads, Retail is coming. You know, well-adjusted adults with nine to five jobs, with monthly expenses and obligations. They're coming to trade digital commodities with us. That's what they're going to do. Just be patient. Retail is on the way. There's a stark difference between the crypto economy of Argentina and the perceived use cases and metas that are often hypothesized about

on crypto Twitter. Local Argentines can't afford to bet on the next shiny Altlayer 1 or be in the meme coin trenches. Their money is going to be working. 1% less tomorrow and 1% less again the day after that, as it has been for all of their lives. Of course, Argentina has its crypto natives who play in the DGEN games, but DGEN activity is dwarfed by the millions of Argentine citizens who don't care about crypto and couldn't care less about the fake world that DGens on crypto Twitter have generated, but nonetheless are using their favorite crypto app, Lemon, Bello, Buenbe, or Ripio to escape inflation, buy coffee, and protect their wealth.

In Argentina, crypto is real. While the government of El Salvador has been praised by Bitcoiners for its Bitcoin forwardness, the citizens of El Salvador do not share similar excitement for the country's top-down investment into Bitcoin. In contrast, the citizens of Argentina are truly excited about crypto, or at worst, are indifferent. Not every Argentine uses crypto, but its usage is normalized and culturally accepted by all. The average Argentine has either directly had their lives materially improved by crypto due to easy access to dollars, payment services, or bankless banking, or they know someone who has.

The bottom-up support and acceptance of crypto is stronger in Argentina than anywhere else in the world. A North Star of Chrysimiento and the Aleph pop-up city is a belief that Argentina is just 100 good startups away from a wildfire of crypto-enabled economic growth and prosperity from spreading across the nation. Just 100 more startups, creating 5,000 more crypto-powered jobs, bringing the value of crypto-in-haping, Argentina, and Argentina will become the first country to reach crypto escape velocity and become the first end-to-end crypto-powered country on Earth. At ALIF, 67 crypto startups from pre-C to Series A are working together at a common co-working space, collaborating on problems, and supporting each other along their way. Twenty-two mentors from venture capital firms, crypto teams, and successful entrepreneurs are present at the hub, offering their time, advice,

and perspective in order to pass wisdom onto the younger generations of startups. Every day, at the Aleph Hub. There is a university quality curriculum of the skills needed to build in Web3. Workshops, talks, and mentorships were available from some of the industry's most technical frontiers. And a huge shout out to ZK Sync here. Overwhelming the startup builders and hackathon attendees cited the presence and support of the ZKSink team who were able to provide at Aleph. The third week of Aleph was ZK Week, and the ZKSing Latam Deverell team went above and beyond providing education in both Spanish and English for the builders here. Here's a snapshot of what a day at Aleph just looked like for the builders.

And here for the podcast listeners, there is just a daily itinerary of some of the activities, starting with like morning health stuff, run club, yoga, guided meditation, and then ZK City boot camp or Road to VC investment in Argentina, or the Aleph Weekly Showcase where people can demo what they're building. Sam Richards presented zero knowledge products. World ID was presented by the World Coin Team. Alex Gloukowski, the Matter Lab, ZK, Sink founder, gave a presentation about ZK, Lisa from Aztec, Kyle from Phoenix, Starknet hosted a meetup. There was also an intro to smart contracts and solidity for showing the younger devs, and then, of course, a happy hour at the end of the day.

This was just one day, and this is only like a third of the things that are on the itinerary of that day. On the other side of the equation, we have malaise digital transformation, the top-down side of things. Argentina is the only country on earth that has both a strong grassroots crypto-intuitive. industry being met with a strong, top-down pro-crypto state government. This is the potential that Krasemianto is trying to unlock. The brand-new president of Argentina, Javier Malay, is deeply crypto-in-spirit. With this new administration making radical changes in the Argentine government, the crypto-leaders of Argentina have identified the potential of permanently embedding crypto as a part of Argentina's growth plan for the rest of the 2020s and beyond. Javier Malay is massively

pro-technology, pro-investment, and pro-aceleration. He has an actual blockchain. consultant, Sergio Morales, in his cabinet. Malay's interest in Bitcoin and Crypto is part of his broader economic philosophy, which includes dollarizing the economy, stable coins, of course, and reducing government intervention. Malay drafted legislation that balances crypto innovation and investor protections and has collaborated with some of the crypto industry to provide regulatory clarity. Part of Malay's initial economic mega decree included the elimination of legal tender laws, allowing contracts to be denominated in any currency. These are good steps. for the legality of crypto in Argentina, but there's still a long way to go.

The real question for the crypto industry is, can Argentina build and lock in a strong pro-crypto regulatory framework that gives crypto entrepreneurs and businesses the assurances that crypto will be legal and protected for multiple decades into the future? Can crypto protections be established that transcend past the current administration? What if a new administration comes and attempts to wipe out the pro-crypto progress that the Malay administration has made, as has happened so much. many times in the past for other industries in Argentina. On the 22nd of August, Aleph hosted regulatory day, where leaders in the Malay administration came to the Aleph hub, the co-working venue

where the 63 startups worked in order to have a day of discussions, talks, and workshops, all focusing on what crypto businesses and startups need out of the Malay administration. It's not just Malay. Here's a picture of the previous president of Argentina walking in the Alef co-working space with his ZK sync team holding the Explained ZK Like I'm Five book that they created. This is like, if Bill Clinton attended the East Denver hackathon. And I just want to highlight two things that came out of the Regulation Day at Crissomiento. Here's a quote from what is effectively the Gary Gensler of Argentina, Roberto Silva. And I mean Gary Gensler, as in the leader of the securities administration, not the person who's trying to stamp out crypto. So, Roberto Silver says,

we are 100% in favor of the normalization of technology of the crypto world. The United States' SEC model is to sue cryptocurrencies, claiming that they are irregular. We do not follow that model. Just one statement. And another thing that happened during Regulation Week was that it was announced that Ethereum and Solidity are now formally integrated into the high school education programs in Buenos Aires. So as a high schooler, you can learn to write Ethereum smart contracts in Argentina. Unlike in the United States, the crypto industry in Argentina is deeply appreciated and encouraged by state officials. There's also the technology that was used to support Aleph. Aleph pioneered some crypto-native technology.

being dogged-futed by the 2,000 citizens at the Aleph pop-up city. Quark ID and Morphy, for example, cork ID is an app incubated by the cities of Buenos Aires that uses verifiable credentials, decentralized identifiers, and zero-knowledge cryptography to produce a user-sovereign identity system for all the citizens of Aleph. After purchasing my ticket to Aleph, I have been issued a verifiable credential that allows my iPhone to open the door to the Aleph hub and access the co-working space. My rights and privileges as a citizen of Aleph means I get an allowance of a hundred Morphy tokens a week. Morphy tokens are an ERC20 token on the ZK Sync-era main net that are redeemable for a thousand Argentine pesos at local businesses that have signed up to accept Morphy for payment for food, coffee, or other services around the hub. A thousand pesos is about $1, but that's also depending on when you're listening to this.

All of this is running on the ZK Syncera main net and represents a real prototype for a Belagian network state running on CryptoRail. Maybe you're thinking, how do they get over 50 different businesses to accept crypto for payment? The sales pitch for crypto as payment is pretty easy. When you learn that accepting regular peso payment over FinTech rails in Argentina results in a 60 to 90 day settlement time, meaning that the businesses don't get their pesos until after it's lost somewhere between 6 to 20% of its value. Last month, Argentina experienced its lowest month of inflation in over five years at 4%. That's 4% in a month, not a year. You think the 2.9% credit card fees are bad? Imagine a business losing 10% due to the currency debasement

simply because the banking rails are holding their money for two to three months before giving it to businesses. When Argentine businesses are informed that they are able to get their money instantly, it's an easy sell. Later this year, Quark ID, again, incubated by the city of Buenos Aires, will build their own independent elastic chain on the ZK stack and will become part of the ZK Sync hyperchain. Quark ID has plans to also build in more traditional services into their app like

Drivers License and other government-issued credentials to user-controlled wallets. For all intents and purposes, if this mission succeeds, this will become the Argentina Layer 2. If you want to go further down this rabbit hole, check out the interview I did with Diego Fernandez, the Secretary of Innovation of Buenos Aires last January. As AILF comes to a close, the Gringos, VCs, and mentors will all have to leave. We all have our homes to return to. the Aleph co-working space is on a three-year lease and will remain open for the crypto startups to use as a common hub for the crypto industry moving forward. Support networks have been created,

connections, friendships, and investments have been made. But will Aleph be the final push over the edge for the crypto industry in Argentina? Argentina certainly has more than its fair share of problems that it needs to deal with, a convoluted taxation system that even regulators know full well that means everyone is dodging taxes, business regulation constraints, not to mention decades of entrenched pseudo-communism that have held millions of voters locked in poverty as they constantly reelect the pronists that are promising them fiscal handouts, massively contributing to inflation, and creating millions of people dependent on that government handout and leaving only a very painful path out of a very deep hole. If there's one thing that has consensus in Argentina,

is that the homegrown grassroots crypto industry is one of the brightest stars on the horizon. While the Argentines I talk to are more often cynical and in despair of the future of the country, they are somehow still optimistic about the alternative tool set that they have been given and the inherent scrappiness that comes with being an Argentine. Well, many Argentines in crypto that I know have become fantastically wealthy thanks to the fortune of crypto. Many of them have not taken that opportunity to leave the country. They love Argentina and the people in it. It's not a place to escape from, but instead a culture worth experiencing and a country trying to become worthy of reinvestment. I don't know if crypto can single-handedly elevate Argentina the jurisdiction

into higher quality living, but we've already seen crypto elevate millions of Argentina's out of poverty and free from currency debasement. Maybe the governments in the modern age are simply too calcified to productively rebuild. That's sad, but that's fine. Crypto can help people help themselves, regardless if their country can.

And if their country can help crypto along, then that's even better. And with that, let's get into the conversation with three Argentine crypto founders who literally have millions of users who are using their products and services. Like I said in my article, normal well-adjusted adults working in normal 9 to 5 job who use lemon cash, Buenbit, or Bello, simply to do normal adult things.

They're not speculating. They're simply using crypto to save their money without losing it along the way. We talk about the crypto industry in Argentina, how they got so many people to use their app, the user behaviors and demographics of their companies, how they chose to manage user risk, when the choices they have made literally impact millions of people. And what's it like to be a founder in Argentina? How has the entrance of President Malay changed things? And what are they hopeful for out of crypto in our Argentina?

I hope you enjoy this episode, Bankless Nation. It's rare that we get to do an in-person interview with three people who have seen everything when it comes to crypto adoption in the country that I think has adopted crypto the most. The video of this interview cut out halfway through, but nonetheless, the audio is totally fine, and the conversation was fantastic. So let's go ahead and get right into the conversation.

But first, a moment to talk about some of these fantastic sponsors that make this show possible. If you want a crypto trading experience backed by world-class security and award-winning support teams, then head over to Cracken, one of the longest standing and most secure crypto platforms in the world. Cracken is on a journey to build a more accessible, inclusive, and fair financial system, making it simple and secure for everyone, everywhere to trade crypto. Cracken's intuitive trading tools are designed to grow with you, empowering you to make your first or your hundreds trade in just a few clicks. And there's

an award-winning client support team available 24-7 to help you along the way, along with a whole range of educational guides, articles, and videos. With products and features like Cracken Pro and Cracken NFT Marketplace and a seamless app to bring it all together, it's really the perfect place to get your complete crypto experience. So check out the simple, secure, and powerful way for everyone to trade crypto, whether you're a complete beginner or a seasoned pro. Go to crackin.com slash bank lists to see what crypto can be. Not investment advice, crypto trading involves risk of loss. Arbitrum is the leading Ethereum scaling solution that is home to hundreds of decentralized applications. Arbitrum's technology allows you to interact with Ethereum at scale with low fees

and faster transactions. Arbitrum has the leading defy ecosystem, strong infrastructure options, flourishing NFTs, and is quickly becoming the web-free gaming hub. Explore the ecosystem at portal. arbitrum.com. Are you looking to permissionlessly launch your own Arbitrum orbit chain? Arbitrum allows anyone to utilize Arbitrum's secure scaling technology to build your own orbit chain, giving you access to interoperable, customizable permissions with dedicated throughput. Whether you are a developer, an enterprise, or a user, Arbitrum Orbit lets you take your project to new heights. All of these technologies leverage the security and decentralization of Ethereum.

Experience Web3 development the way it was always meant to be. Secure, fast, cheap, and friction-free. Visit arbitram.io and get your journey started in one of the largest Ethereum communities. Launching a token? Don't let complex legal and tax issues slow you down. Toku provides specialized support to optimize your launch and ensure that you as a founder and your team and your investors get the most tax-efficient. outcomes. The Toku team understands the crypto space inside and out and will ensure your token launch is fully compliant while maximizing tax efficiency. Toku can connect you with the best attorneys if you need

them to make sure that you have the best advice and Toku can help to optimize your taxes so you pay the least possible amount of taxes while still maintaining legal compliance. With Toku's guidance, you can concentrate on building your company while Toku handles the logistics. Token launches don't have to be complicated. Talk to Toku today to get a free initial token valuation. founders in Argentina. And we're here today to explore what crypto looks like in Argentina, because it looks a little different than I think what most people are used to when they think about crypto from crypto Twitter or crypto when they go to some European or American conference.

So the three founders that I have here today, first on my left, we got Marcelo Cavazoli, Marcelo from Lemon Cash. Marcelo, welcome to the podcast. Thank you, David. It's great to be here and I'm super fun of the show. And in the middle we got Frederico Ogwe from Buenbit. say hi. Hi, everybody. Thank you, David, for the invitation. And then last one, not least, down at the end of the couch,

we got Manuel Bedroo from Bello. Manuel, welcome to the podcast. Yeah, thanks for the mind. Great to be here also. So we are in the middle of Crazy Miento, which is the movement of crypto growth in Argentina, specifically at Aleph, which is a one-day pop-up city, the co-working communities right across the street.

62 crypto startups are all heads down working along with regulators and just VCs, all kind of, coming together to promote crypto. And my role here is to tell that story, to also tell the story of crypto in Argentina. And like I said, it just looks so different from what I think we are used to in the United States. All three founders here, the companies or respective companies, have millions of users. And I think that's just a very foreign concept to many crypto companies in America. Like the idea of having a million users is something that we dream about.

Not too many crypto companies have a million users. You have Coinbase, all the exchanges, basically. And then after that, there's not that many that I'm familiar with. And so the first thing I want to do in this conversation is kind of really explore how big crypto is in Argentina. Because especially with your guys' users, you guys' users, I wouldn't call crypto people. They are normal Argentines, well-adjusted adults doing normal things. And they're not, they're not de-gening into tokens. they're not doing any of the stuff that we find on crypto Twitter.

They are just living their normal lives. And so maybe we can start painting a picture of the customer base of your guys' companies, some metrics that you might want to share if you can, just to kind of like show how big your guys' customer base is and how big the industry is in Argentina. So, well, I think there's not just one group of people. I think you will discover that there's many different groups and audiences that use crypto. for different needs.

And I think that in our companies, that illustrates a lot because each of us have a specific focus that maybe it's more appealing for an audience. In my case, in Lemon, we are a wallet that combines crypto and Fiat, and it's mostly focused on the Argentine, this one that you're describing, right? the common Argentine that gets paid in pesos and that uses lemon every day. So for us, it's a combination of, it's like, imagine having Venmo and Coinbase combined.

So in our case, what we have is that is one wallet that we aim for the user to be the only wallet they need for their traditional fintech or finance needs and for their needs. and for their new needs. In that sense, we've grown a lot since we started. We are right now in 2.6 million users, registered users. Half of them, 1.3 million are active annually, and more than half a million are active every month. So it combines different groups that I think we will discover in the talk,

but what we have the most is people that use it every day, use lemon every day. So if it's Venmo and Coinbase, I'm guessing it's the most common swap is from peso to crypto dollars in some particular way. But then the rest of the usage of Lemon is for payments. Is that right? Yeah. The most, let's say swap is pesos to dollars. However, in Lemon, and I think that this is different for each company, the asset that people held the most, especially this year, has been Bitcoin.

So we have more Bitcoin than stable coins. And that's something that I imagine not everyone expected. So we have more Bitcoin, more stable coins, and more ETH than pesos. All right, down the line, Frederico. So Bienbit, how does BNBitt fit into the crypto economy in Argentina? Yeah, it's one bit. Like in Bueno, good bit. That's not me, not knowing.

That's my accent and pronunciation being terrible. So, no, as Chelo said, Lemon is like an everyday wallet for the payments. In our case, OneBits is an app for investing, no. We're for investing and savings, and our main product is crypto. For example, stable coins as a way to dollarize your savings and generate a yield on your savings. And then we have Bitcoin, Ether, and the other tokens as an alternative for investing in non-traditional assets and digital assets. In our case, we have 900,000 registered users and we have 70,000 monthly active users. So where Lemon Cash might be more for payments, yours is more for savings and growing wealth

and investing? Is that a fairer? Our main KPI is assets under management. So this is like a Robin Hood for people that are in these states? We're going that way. We're trying to now open and be more of a holistic investment app. and we're starting to attractify assets. Right now we're just crypto.

Okay, beautiful. And then Manuel, down to you. In the case of Bello, we understood that our main audience was mainly freelancers, remote workers looking to work from abroad throughout Latin America. So we tried to support as many countries as possible. Obviously, in Argentina is the widest audience. We have some interesting cases in which you have like, these retired women in their 80s that they are saving in Bitcoin because we have, you know,

a big chunk of, let's say, crypto-dinated people in Argentina, which has been Bitcoin first for most of their life. In terms of the usage, we kind of are in the same page that although most of the volume is in stablecoins, the big chunk of AOM is in Bitcoin. So people start we give them DCA, so they have a really easy way to, you know, getting exposed to, to Bitcoin and other currencies. And the usage is also kind of daily, daily base, but we try to narrow it down to, you know, these guys which are, no, internet, native people that are looking to connect with other countries and do a lot of cross-border payments.

And then how would the products and services differ from your two compatriots here? Like, how is it occupying a different niche? Yeah, it's a good question. Obviously, I mean, I think we are the last company to see the light, although I've been in the space for some long time. We tried to kind of specialize into one segment and provide value there, which I think at the end of the day pays off really well because when you try to go too broad, at least in our experience, that can be a lot of ways of resources. So we try to narrow it down to freelancers, remote workers, give them ways to collect from abroad, pay abroad. We integrate with PICs, which is the Brazilian PEPA method. So as a VILA user, you can go to Brazil, pay as local, which has been really an interesting experience.

And we tried to replicate that in other markets. I think, you know, you need to build your audience and also from there build a product. So it's kind of this process through you. iteration, which basically also let us. Vision is super important, but, you know, talking to the user, it's mandatory, you know. And it's interesting because, you know, like a couple of months ago, maybe a year ago, all of our apps were pretty much the same, you know. And when the bull, the bear market came and things got tougher, we started to think, okay, what's our competitive advantage or what's our core niche? And now I think we're like diverging and everybody's focusing

on a specific use case or audience. Maybe just to add that we do, we do, every year we do a report that we share all of the data we compile from our business metrics and from our internal usage and we share it with everyone. So you can look at it in the website. And I think that something very interesting is in this research, you will see that Argentina has more on-chain volume than Brazil and than Mexico in terms of

on-chain. And we're 45 million people. Brazil is 220, 2030. Mexico is 125. So that means like the on-chain volume per citizen is way up over the rest. And I think that is a very big opportunity, especially even when you look at the Lemons numbers and we sum out the active user race after finance is the largest in Latam so even we are mainly focused in Argentina now when you look at that from sum out is the second largest active user race in the whole region

if you take out the casino what about demographics inside of our Argentina. So crypto typically skew is very young. And I would imagine that's pretty similar also in Argentina. But are there like professions that like find more usage in crypto that you guys find on your guys' apps? Does it actually skew young people? How far old does it skew? Like any sort of just like unique tidbits of information to pull out here? Yeah. So I think the curve should be pretty similar in every in every platform. You see a big slope, you know, in the 20th, 30s. And then. long tail towards 90s, 80s. It's interesting, the mix between women and men,

this in Bello, it's pretty similar. So there hasn't been, you know, a big difference. Usually you think of crypto, it's like 90% male and it's not like that. And in terms of profession, I think it's pretty broad, you know. You have like, from, people which are working, you know, 95 to government officials, to policemen, no, firefighters.

I think one thing that, I mean, crypto in Argentina has gone through different, let's say, waves of adoption. In some cases, pretty connected to the bull markets. But in other cases, I think the guys from Bon Bitt has done terrific job in, I think it was 2017-18 with stable coins. That was massive. And I think a lot of people get into crypto through stable coins and kind of change their ways of operating and thinking about money.

Because in Argentina, usually you have these customs around saving in actual notes, dollar bills. Argentina is the second place in the world with more cash dollar than anywhere. So it's, you know, it's a really common to actually saving dollars. And we are seeing a change in habits in how people are doing that. And I think stable coins as a whole has been, you know, pretty, let's say, a democratic way of getting into crypto, you know. I was going to add, you want to that something?

I was going to add to Mano that the faces are super, like, noticeable. in the past, many people came because of trying to hedge against the peso, right? Say, hey, I don't want my money to be lost. And it's something that is hard to understand. But if you look at Argentina, I think in 2023, if you look five years into the past, if you just held pesos, you would have lost 95% of your value. So that's like, yeah, we can talk. it's maybe like a, like a, you know, like a meme coin level drop.

But that means for people, it means that in five years, 95% of the time you invested, your savings, it's just gone. So that created a huge demand that we all experienced. Like, Fere was one of the first to do the crypto dollar, it got really big. And then it started to mature. Started to go to other stable coins. and recently I'm surprised Manuel you guys have the same

people are saying more in Bitcoin so I think it's like learning you know we know the peso we already know a little bit the dollar let's just go to harder assets and even having more ease than pesos today so it's like people are maturing I think yeah so I can't remember what this specific metric is

but it's something like one or two billion dollars of hard physical cash is actually inside of Argentina because of this very strong demand for dollars because of the inflation of the Argentine peso. And so you would think that if there's that much demand for physical dollars, that Stablecoins would be the obvious product that everywhere in Argentina everyone would love.

And that is why I think your guys' companies are some of the most successful in Argentina. But it also asks the question, why isn't everyone in Argentina on your guys' apps? Like, why isn't everyone in Argentina using stablecoins? So, like, what are the reasons? Is it, like, education? People just haven't, like, learned about your guys' companies. They don't trust stable coins. Like, for what reasons are you, have you guys not won over the entire country, would

you say? Can I ask you a question, David? Sure. Did you have the experience of changing US dollars to cash in Argentina and a queva? Yes, I have. Yeah. How was it? I mean, I wouldn't call it bad.

I went, this was when I was here in January and I took like $500 in to get it changed into pesos and walked out with a plastic baggie of cash. and then I realized that maybe I swapped too much because I could have swapped later when the exchange rate was different. I mean, it was cumbersome in the fact that I had to actually go somewhere. And so it took an hour out of my day. I was also unsure if I was getting the best exchange rate because different places were giving me different rates. And so there was some level of uncertainty as well. And so, yeah, that's kind of my answer.

that's like a really Argentinian experience, you know, going to a queva with the US dollar bills. Maybe you have like 10 bills and you get a bag full of, you know, Argentinian bills. And related to your question, I think it's a thing about trust, you know, people, you know, trust the physical cash because they had really bad experiences with the banks, you know. in, I think it was 2000 or 2001, we have the Corralito that all the US dollar deposits in the banks were confiscated. And they were exchanged to a virtual, you know, exchange that was four times worse than the real exchange rate. So Argentinians got burned with that, you know. I think it's something of the older generation.

But in general, Argentinians do not trust institutions. you know, and prefer to have the US that are physical. That's why, as you say, it's calculated that there are 200 billion US dollars in cash, you know. So our work is trying to break a little bit of that, you know, fear of institutions and say, okay, that was something of the past, you know, also digital currencies and stable coins are something of the future. it's not the same as having your deposits in the bank. It's also a value proposition that we offer.

You know, if you have stable coins, you have money outside of the country. It's not in an Argentine institution. But I think it's something that you have to work with a trust, you know, with people. Yeah, I think there is a few things there. So Marcao Pao is the biggest fintech here in Argentina. I don't know how many users they have, but I'm sure that near maybe 20 million, something like that. it took them like a few hundred million dollars to reach that point and more than 10 years.

And we are just getting started, you know. And the thing is that we are dealing with, let's say, we are selling other assets. But as Fed is said, people in Argentina like to hold the hard assets. So there is kind of a bias towards, you know, there is a paradox in a way, you know, because they want the hard asset, but they cannot touch it. And I think what we have done has been really interesting on, for example, connecting all technology with future of money, which is the use of a prepay card, you know, or the card, the plastic, the actual holding the plastic card,

allow people to kind of reroute their minds in the sense that, hey, I know I have a harder asset, but I know I can just use it to buy, you know, a fridge or whatever. And that, I think, helps us a lot into adoption. Obviously, at the end of the day, you need to invest in user acquisition, education, and a lot of stuff. And that usually takes some time, you know, to accomplish. I was going to add on Manuel's point when, especially in Lemo, when we did the card, I don't know if you saw it, but I think, yeah, the three of us have

cards, right? that would be interesting. This is the lemon card. And it has the Ethereum and Bitcoin logo. And I think you guys also have the card. All right, sorry. You guys all have cards from your own respective companies? Yeah.

That's funny. That's funny. So for the podcast listeners, we have three different visa cards being shown up on the screens from the three different founders. One's a master card. Yeah. Cheers to master's a guy. You guys are the competition.

Yeah. Two to one. But the most important I think here, like we wanted, today you can use crypto to pay with the card. You can use your pesos or you can use your crypto. And today in Lemmon, and we share this in the report, people, the volume paid in crypto is 20% only. So only 20% of the purchases done with the card are done with crypto.

and the rest is done with pesos. Now, it was very important for the card to break that feeling of this. It's already complicated industry, like, you know, it seems like crypto lives in a bubble, in the cloud and financial stuff. So people didn't have something to touch. Now, with this plastic, they can touch it. They can say, oh, I can go and I can spend it. So it allowed to, like, unroot that system, that chip that we have.

And yeah, well, now it's a lot. In Lemo, we issued more than 1 million cards. So it's 1 million people that, I think you guys also do the same. We give some cashback back to the user. So that's 1 million people that got their first atoshis, that experienced the first, you know, getting Bitcoin without risking or accents in crypto without, you know, investing at first. And it's kind of like it was like the first step to break that circuit.

So you mentioned you guys brought up the idea that Argentines don't trust institutions. And none of you guys offer a non-custodial product. You guys are all custodial products, correct? And, like, there's one reaction to that. It was like, oh, bummer, it's not totally bankless, right? We're not promoting self-key, self-custody. But also on the flip side of things, like, how else are you going to onboard a million people? And so, like, there's no coincidence that the three biggest, you know, companies in Argentina are all custodial,

because that's what it takes to get people's first steps into the world of close. crypto. But you also say it's it's the biggest hindrance to people actually trusting an institution because being a custodial institution makes you an institution. Is this an education problem? Or is this like people just being wary of things that are new and they have their own preferred way of like, they just want to touch the dollars? And like, or how do you guys like kind of solve this like this issue of trust when it comes to your customers? Yeah. Maybe this is an unpopular are common, but is everyone ready for self-custodian solutions? I don't see my mother holding their keys and remembering everything.

So I think for me, maybe I see this as a more pragmatic view, Fiat is the elephant in the room and we need to kill Fiat in order to actually make this Satoshi vision, you know, actually accomplished and it will take a lot of time. And I think each one of us needs to play a role in this movie. I would love to have a self-custodial solution. And I think there's a lot of nuances in how people operate on how they build, you know, their experience in the product that needs still to be solved because, no, in general,

self-cultural solutions are not the most friendly ones. But going, sorry, to your question around how people see us as an institution, obviously, I mean, you have lovers and haters. I think it's part of the game. Someone that used to work at this gig economy platform said, this is a big numbers game. So obviously you need to learn to listen to your customer, but you need to see kind of the trend also, you know,

because obviously someone, they say, ah, you're a froster, but he's a froster. So you need to be really careful of how you actually operate the whole thing, you know? I have two points here. The first one is kind of more personal. When we were getting started and you guys too, there was a moment in time that essentially, companies were the enemies.

We had a lot of the industry attacking us. I remember money, right? We were on a podcast, I remember. From a lot of wallets of custodial that they were like, oh, you guys are the, you know, these guys are a custodial. We need to get rid of them. It's like, we just want to help. You know, we want to onboard people.

Many of those wallets that were back then, they don't exist anymore. And the ones that are the ones that really added value and that onboard the people. and that when the user ends their education path, they can jump to a self-custodial. So I think that the first part is, I mean, you need to add value to the user today.

And I think that's what we focus on and it works. And taking minus points, people, first they need to get rid of fiat, of something that they cannot control. And stable coins, but Bitcoin is better. decentralizing the monetary policy, which here we don't control. And then in the second place, we get, for example, in Lemon, around 40,000 tickets per month of people forgetting their password or changing the phones. 40,000 per month.

So imagine if we give, oh, here's your keys. There you go, sir. Don't lose them. Yeah, exactly. I think that probably in one year we will lose our entire user base if we did that. So I think that we, of course, want that crypto future more than ever. But I think the tech has to evolve. There's a lot of things that in crypto need to get better. In terms of security, in terms of the UX tools like account destruction, gasless transactions. There's a lot of things that need to evolve. And they're going to be there. Like my good news is probably in two years, three years from now, I think the industry will be ready to jump.

But now I think it's time to keep focusing on bringing more users, to getting them to crypto. And when it's ready to go, we will launch them to the centralized world. When you guys onboard new customers and they are just using probably some of your most basic services, like simple peso-to-dollar swaps, simple payment stuff. I imagine that's where it starts. and then some users grow in their relationship with your guys' products. They become power users over time. Maybe at the end of this journey, they become crypto-pilled, and they start listening to crypto podcasts, hopefully.

How many people, like, kind of progress down this arc? Like, how do you get people to become power users? And is that, like, obviously, that's one of your guys' goals, but just, like, what's the carrot that is pulling them further into your guys' products and apps? I mean, there is a lot of will to become a crypto power user. You need to be really on it and convince than this is the future. My view is maybe more simplistic. People want the best solution to fix their problem.

And I think crypto in that sense make it super easy to tackle a few problems. For us, obviously, you know, starting with buying and selling, spending, paying for bills, top up, you know, with your mobile, starting to experience with gift cards because you don't pay taxes with that or you do cross-border payments or you start, you know, understanding that

instead of buying every day, manually you can set up a DCA. So I think it's, I mean, I don't, maybe I don't have one direct answer. I would say that right now, like 15, percent of the user base at this from Bello are crypto-native. And no, I think that will reduce over time because I think the rate of growth of non-crypto or let's say more pragmatic users, it's higher than the ones which are already there.

So yeah, the art for crypto-native is definitely lower, you know. Yeah. I guess I mean less more about like becoming a crypto-native person. but just like they start they start their relationship with you guys just like one percent of their yearly yearly financial activity starts in in their app in your app and then some of your users i'm assuming grow to five percent 10 percent maybe beyond 50 percent of their financial lives happens inside of your guys as applications how how many of those users like how far can you pull users down into just being just their financial like relationship is with like lemon bellow bimb it uh like and and like

why are they using your guys as products? Like, why are they becoming, like, dominantly a crypto product user? Mm-hmm. What I think is that it's one of the best ways to get people into crypto is solving real world problems, you know? And related to the question you asked before,

people in Argentina have, like, many, many other and more important problems that self-custody, for example, protecting their money from inflation and evaluation, being able to receive money from abroad, from a remote work at a cheap cost. And that's what we solve with crypto, you know. And then many people go on and get into the rabbit hole of crypto and really get into crypto.

In my case or in our case, and I think it's the same case for Chelo and Manu. We try to solve real world problems first. And then people then like trickle down into crypto and get more into deeper into self-custody and the philosophy of Bitcoin. You need to kind of see it from the prism of Maslow pyramid, you know. You need to kind of, the base of the pyramid, it's, there's a lot of, you know, really interesting use cases where DFI, maybe it's, you know, not so common or, or, yeah, to, to everyday user.

But if you kind of embed it into a more user-friendly solution can be still used. So, yeah, I agree with Federer. In Lemo, we have this approach, which is interesting that you ask this question. Instead of thinking kind of like, you know, build something and then the users will come. Like, that would be for us that is getting people into crypto. We have this mindset doing the opposite. It's introducing crypto to people. So it's like, hey, this person in their daily life, how can we make their life easier?

How can we make it better? And we use crypto superpowers on the traditional fintech rates. So that's on one side. And the other one is when you think about why would they migrate and go to the next step on decentralization, one of the things you think is defy, right? well many platforms I think including you guys we already have defi integrated in our case we have abe connected we do that all in background and it's so transparent you can see exactly how much is deposited in every contract it's super transparent of that we don't even take any fees we just help the user

connect and imagine i don't know my my brother or my or my father you know trying to sign all of these contracts moving away just one click here in leon I'm in a bit. I believe that, and this is maybe not some common idea, I believe that that jump to the crypto world is not going to come from this decentralization mindset. I don't think people that are born today, think like that. I think it's going to come from interoperability. I think it's going to come on a world where, you know, there's full of applications

that people can use and can leverage on one app and the other. I think once we have that kind of like big dub store, when call it Ethereum or other chain becomes kind of like this place full of financial products and not only financial internet products that makes money with the internet, and you can use it, then it's going to be an incentive for people to jump. Otherwise, I think, you know, it's from my father, it's better for him to use lemon just to have his money in Abe using lemon and take care. I think users are willing to pay for you to take care of that money instead of carry that burden.

Fere, Buenbit, what are the users most interested in when it comes to growing wealth? Do they like yield? Do they like buying Bitcoin and hoping it goes up in price or buying other financial assets? What are Argentine's preferred way of growing wealth? Our main product is stable coins. stable coins and earning a yield on stable coins. Different from Mano and cello, most of our volume comes from stable coins

and most of our assets under management are in the USET, Dye and USCC. And how do you actually offer them yield? Like where does the yield come from? From DFI, from DFI, yeah. And so how do you manage those choices? There's a number of different ways to get yield. You can go to MakerDAO, you can go to AVE.

How do you manage the choices of the ways to provide yield? We have a team that analyzes the safest, and we call them like the blue chip defy protocols. And then we just say to the customer, you're going to deposit in ABE, no. We say that to the customer. The customer just has to say, like, opt-in, I want to invest, one-click,

and then we do everything on the back-end. Okay. But we try to choose, you know, ABE, compound, maker, the top different protocols that have a history of, you know, robust. How many, do you know off the top of your head how many users are opting into a service like that or how much TVLs? In stable coins, we have 22,000 customers that have stable, more than $100 in stable coins and are investing in defy. Okay, 22,000 customers with stable coins

investing in defy. That's a lot of customers. It's a lot of responsibility. You said you have a team vetting like the contracts, but like these are people who I'm sure maybe their first time even seeing the words maker dower aave are through your your application uh we're gonna i'm gonna bring up some regulatory questions here in a second but just like you guys are all navigating this far ahead of the argentine government can even like reason about uh how how have you got navigated this problem of just like making options for users to preserve and grow their wealth that also have like risks associated with them and since they're not becoming you know bankless self-custodied people managing the chain themselves, you're enabling some sort of behavior which can have consequences.

So, like, very big decisions are being made here that, like, in the rest of the crypto world, we know exists for our future, but you guys have already, like, made some of these decisions and have them in the rear-view mirror. So, like, talk about the growth of this business line. Well, it is a big responsibility, you know, and I think it's our responsibility to try to educate and communicate things as clearly as possible. So we had the example with Terra, that happened to everybody in the crypto space.

And that was a very hard moment, and it was a really, you know, experience and made us learn a lot about that. But we try to be as clear as possible with the customers of what are the risks, what is behind the investment, you know. But then people, it's real that people, trust us and I think we invested a lot in education and I think it's also a thing of time.

You know, trust you will trust with time. We've been in the industry for seven years now. And yeah, it's really important. It's something, it's a responsibility and that I, it's a way on my shoulders to be honest. But we try to do the best that we can in being clear with our customers. I think there's an interesting metaphor that you can use, which is you don't want to have the, you don't always want to have the fastest car,

but the car with the biggest brakes, because when you do asset management, as Fez-Zell, the responsibilities are humongos in a way, and, you know, part of what you build can be destroyed in one second, you know, so, and the problem is that,

I think it's part of the psychology of people overall. They like to kind of transfer their responsibility to you when they choose to opt in for something. And there is a lot of, you know, power also in that decision, you know. So you need to cool down your head and think, you know, really, really well on what you do, and how you do it.

We took out all of the, decision making I think with a block fee and FTX and all of that we said this this is too much so we just let the user pick now we have only our connected we are planning to add more protocols like even like state ease but it's not going to be so many because as manual mentioned even though you make the user like maybe give them options you're still kind of like in between and they're still going to, you know, take you accountable for it.

But yeah, we took it off and say, hey, guys, this is defa. We can connect it if you guys want, but we're not like choosing or making decisions. There is kind of this, I will call it, sinister game in which when you provide a lot of high yields, depending on the market condition,

that can backfire you really quickly. So I think what is happening now with real world assets. So in some cases we use Mountain Protocol, for example, for silver coins. I'd say kind of a great way to do it. There is some kind of ideological problem with that. It's that you're giving money to the Fed, which is what you're doing. But I think it's, I mean, you need to kind of work on those balances in order to give a more robust experience for the user. which is also kind of anti-cyclical to what the market is showing you.

Yeah, I think this conversation probably isn't too foreign to listeners about the tension here between having a large amount of users who have their saving. So they're not speculators. They are trying to save their real money, hard-earned money. You guys as startups need to offer the products and services that people want. So there's pressure to add in these yield sources into the apps. But then also you need to slow down and not add something too fast too soon because you have 20, 30, 40, 50,000 users who are going to press that button. And so the repercussions are very large.

And so there's a tension to go fast. There's a tension to like slow down and move more slowly. But then also we have this thing that happens when like Alex Mishinsky exists somewhere. And he is cheating while he is sourcing yields. So you guys are offering a very stable yield of like 4%, 5%, and Alex is offering 16%. And how can you compete with that when this guy is offering like that much? And this is what happened to BlockFi. Maybe BlockFi would have been totally fine.

But BlockFi was tugged by their competitor down the risk curve because Alex Machinsky was cheating. And so this tension exists. And so there's also a lot of complexity here. And so like how do you like navigate all of these different tensions? I would say something. As with competitors, you don't want to look that way. No. I mean, to be honest, we are part of the ecosystem,

but I don't look at when we don't live on to do whatever we do. We just focus into our user base and what we think is best for them. I think getting to the yield world, it's a problem because you become the yield. And that we know how it ends up. I prefer to maybe, you know, be less competitive in that sense, but resour that I will sleep by night. And you also brought up Mountain Protocol, which I think is interesting because you could take your stable coins, you could deposit into AVE, MakerDAO. These things are stable and secure. They have been for a long time.

But nonetheless, there's like smart contract risk, especially if you use perhaps like a yield aggregator, which is kind of what like blockfi was. it was a yield aggregator. But Mountain Protocol, you're actually just putting it into doing one thing with it, which is putting it into the Fed. And so there's kind of like a de-risking of that as well. Is that why Mountain Protocol is like attractive? I think it's, as you mentioned,

I mean, we need to diversify risk, you know, because I think that's kind of, I'm not an expert, but it's kind of the whole thesis around asset management. You know, you need to put your eggs in different baskets and each basket in different trains in order to have a secure investment. I think what they did was one of the first, at least as far as I know, which start offering these high-yield T-bills to the public,

but through token assets, which is, I think, really interesting in terms of what else you can do on-chain, which is blended also with the... tri-fi ecosystem. I think that is where also the, the, the, say, this war is heading. It's not just black or white. It's all those grays

in the middle, which make all these products super interesting, you know? And you need to test it, you need to kind of, you know, go through that experience and get the most

and translate that into really powerful product, you know. I'm going to add like a, ugly truth. In terms of the security of the risk on the yielding,

I'm sorry to say the user doesn't care. They don't care. You try to explain to them, they don't care. They say, oh, 10% is right.

I think that those solutions like Mountain are really good, especially for companies like us, that we don't want to travel. We don't want to be, you know,

like Machinsky and so on. And, I mean, it's kind of like it's sad because you want them to understand the risk, but they are not going to care. I think you will lose users, but you will use the users that are more after that yielding.

The users that, for example, you add at value to, they're going to stick. So even like, you know, like purchase out your mercenary users. So I think that we are like kind of like in that era, we saw what happened with all of these companies that fought for the highest yield. And we, we are not longer in that race. And if the users want to do it, they will find the platforms. They will find those, you know, sales use app off of the world.

And I hope they don't disappear. New projects are coming online to the Mantle Layer 2 every single week. Why is this happening? Maybe it's because Mantle has been on the frontier of Layer 2 design architecture since it first started building Mantle DA, powered by technology from EigenDA. Maybe it's because users are coming onto the Mantle Layer 2 to capture some of the highest yields available in Defy

and to automatically receive the points and tokens being accrued by the $3 billion Mantle Treasury in the Mantle reward station. Maybe it's because the Mantle team is one of the most helpful teams to build with giving you grants, liquidity support, and venture partners to help bootstrap your Mantle application.

Maybe it's all of these reasons all put together. So if you're a dev and you want to build on one of the best foundations in crypto or your user looking to claim some ownership on Mantle's Defi apps, click the link in the show notes to getting started with Mantle. The Uniswap extension,

is here. The self-custody wallet created by the most trusted team in defy, Uniswap Labs, designed to make swapping feel effortless. This extension lives in your browser's sidebar, letting you swap, sign transactions, and send or receive crypto

without ever losing your place on the internet. Plus, with human-readable transaction messages, you'll always know exactly what you're signing. Navigate a multi-chain world effortlessly with support for 11 chains like Ethereum mainnet, base, arbitram, and optimism. No more chain switching or token importing. All your assets are right where you need them to be.

Swap Extension is designed to level up your swapping experience with other Uniswap Labs products as well. Easily on board to the extension using the Uniswop mobile wallet to begin managing your assets across platforms and take advantage of smooth, seamless synergies with the Uniswap web app. So go and download the Uniswap extension today by clicking the link in the show notes. Just another way Uniswap is helping you swap smarter. The Obel Collective is up and run and is maybe one of the most important collectives that you've never heard of. Oble is bringing distributed validators or DVs to the Ethereum staking stack. Distributed validators allow multiple parties of people running multiple nodes to create a single virtual Ethereum validator.

Together, this makes participating in Ethereum consensus more accessible, more affordable, and more inclusive. It is a stritz improvement to the Ethereum staking tech stack. With collaboration from Lido, Etherfi, Eigenlare, and 50 other entities and thousands of individuals, the Obal Collective is working to scale and decentralize Ethereum using DVs. And now you can get involved, introducing the OBLE Contributions Program. Visit obel.org slash bankless to stake on DVs, either through a partner staking protocol or at home. Earn access to future governance and ownership in OBLE while contributing to retroactive funding for projects that are actively decentralizing Ethereum. This is your opportunity to secure inclusion in one of the most important projects working to scale Ethereum's foundation for future growth.

Visit obel.org slash bankless to get started. That's obo-l.org slash bankless. What's it been like building under the laws of Argentina? And so this is a very new industry. Crypto in Argentina is very huge. How have the laws of Argentina either gotten in the way or what's nice about building in Argentina? What is it like to build under this regulatory environment? Fun. Yeah.

Stressful. Oh, stressful. No, but to be to be fair, I mean, my previous company was an exchange, one of the first in Latam. And we opened a bank account in 2015. And at that time, and still today, banks have been the de facto regulators in the ecosystem in many ways. And I think Argentina is pretty innovative, and they kind of open your arms to do stuff, which I don't see in the US, for example. I mean, you have clear opposition from the government against crypto, and that's a motherfucker, you know, because it incentivized innovation. So right now we have a regulation here for BASP license.

My fear is that that will kill innovation because two guys or two girls in a garage, maybe they don't have enough assets to actually build a company of this characteristic. But I think in general, you know, it has been pretty open, pretty innovative, a lot of, you know, less a fair in a way. You need to play ball. If you're a frostor, you will go down really. quickly. We have a, let's say, a heritage of lots of ponces in Argentina, mostly in places where people are not well educated, which is obviously backfathers to you because May media say, this new Ponzi called Sob Cash and they put a picture of Bitcoin, which doesn't make sense,

you know, but that's part of the education process. So, yeah, I mean, obviously, I think it's take time, but I don't know. Maybe I'm just old, you know. I was going to say, Manu, that you had a totally different experience that I did. For me, it was super hard, man. Yeah? It was hard for the banks. We got shut down. We opened a bank account three months later, got shut down. We had to say we are a software company. We had to say we're tokenizing got shut down. It was, oh, again, we got open a new account and we went to these crazy banks that didn't understand like what we were doing until they figured out and shut it down.

Then you didn't know if you would wake up and your company like crypto would be illegal or something like that. I remember I had such a terrible experience and you were part of it. One day we woke up, I woke up and I saw my WhatsApp, a friend sent me like a link of a news, an article.

And I opened it says, the central bank is investigating crypto companies for financial intimidation. I say, what is financial intimidation? And I asked my, and I asked my complaints guy, he says, Chello, that's a crime, four years of jail minimum. He's like, no, man, no way. I asked, is there Wi-Fi in jail? It's like, no, no.

And then I called for it. I said, hey, guys, did you see this? So you didn't know if at the next day you would be not only shut down or block your operations, but even you could go to jail if these crazy guys. decided to. And I think that that has changed a lot since then. And I know, Manu, what you mentioned in the regulation is true, but it also gives peace, you know, because you cannot invent a new regulation. This is the regulation. I mean, that's it. It's written here and it gives clear rules for everyone. Yeah, I have, you know, mixed feelings with regulation. I think it's, um,

regulation is a really easy way to build new businesses for lawyers for selling their time, you know, because, I mean, it's what we see every day. I think the main thing, and this is something that we discussed like two years ago, it's actual security around the law. So if these are the actual regulation or laws that apply, stick to it and you know you won't go out of business or you don't have this

surprise visit or whatever but changing the rules of engagement all the time that's the main problem with Atritina. That's what I think Chelo was also saying but from my part of view you don't need to have a regulation to actually have rules of engagement.

You have other laws which implies don't doing fraud and other stuff around that But I agree that hopefully we'll see maybe one year or two, regulation will bring more external investment, which is, I think, the only thing that Argentina is lacking. So talking to you, BCs, come invest in Argentina, which is what we need, you know.

Exactly. Adding to what Manu said, you have regulation and you have regulation like in Argentina. That is something that changes every day and that you can, you know, wake up one day, and especially on the weekends, they put like a new regulation and everything changes. And you have to go run and change everything in the back end, the back office and all that stuff. And having said that, I think we crypto companies thrived in that ecosystem because crypto was a way or a tool in order to like find a way to all of the, how do you say, like the new blockers that we had.

So in that sense, I think it was good. for crypto, all of those regulations and no uncertainty about what was going to happen. I have two points. The first in terms of regulation, I agree, Manuel, in terms of innovation, but something that we did that was really important on the regulation is that it didn't mess with, it didn't touch the decentralized world. So even like we went discussing with the regulator and say, oh, let's make this, you know, have to, for the self-custodial wallets, they have to register.

No, no, no. Self-custodial, everything, let's just keep that aside. Let's keep that innovation open. And basically what it is today in Argentina, it's not so complicated. It's just this VASP, which is kind of virtual accessory provider registry that you need some, you know, standards to comply with. And then you have to comply with the anti-money laundry and terrorism unit so that, you know, you can interpret with other systems.

But this brings a lot of new cases. Because you're institutionalized, you know, you have this regulation for these institutions. Then it allows, for example, we had two weeks ago the first company that was created where the treasure is in Bitcoin and Stable Coins. And this is because it has a VASP behind it. Then there's going to be this big taxation event, this tax exemption event called the Blanquet, or if you had money that you didn't declare, you can declare it. How do you come to? Tax amnesty. Yeah.

Where, I mean, if we didn't have this regulation, then you probably wouldn't be able to do it with crypto. You should only with dollars. Now with crypto, because we have this standard, we can, it's bringing more opportunities. I think that it can, even in the future, real world assets or tokenization, I think it's going to be really important to have that.

And if we keep the decentralized world out of regulations, I think that's fine. I agree. I agree. We need to kill some taxes. So here you pay taxes for the things that you withholding taxes. In Greece of a bit of personalize, you know, with a wealth tax, which is, you know, nonsense. So I think, yeah, all right, I think the long-term value is there. my only concern because I see this in New York,

bid license, kill the business. Mexico, the same. So there's a few cases in which a bad regulation can kill the industry. And I think as players in the country, you need to work on that direction. You know, it's not just our business, but the actual ecosystem that you need to protect in order to have a bigger cake, let's say.

So the answers I'm getting, It doesn't seem that crypto has really been targeted as an industry. It's the laws and regulation around finance as a whole that you guys are having to work around. There's no like crypto-specific laws that are targeting or repressing the crypto industry. Is that right? So bus license is from this year. So it's pretty new. And it's mostly, as Chilo said, in registry and you need to inform movements.

And it's more on the EML side, you know? How has the entrance of Javier Millet becoming president not terribly long ago, six, seven months ago? How did that change any like doing business in Argentina, being a crypto business on Argentina? How did that change things? I can start with external point of view. I was in Silicon Valley, I think two months ago. And the last time was in 2022. So when I went in 2022, every VC, as a...

me the same question. When are you living in Argentina? When is your company going to be in another market? And you had to make these plans on, you know, how to get another market and so on. This time that I went, not even one asked me that. Actually, what they asked was, how much can you grow in Argentina? So I think on one side, it changed the perspective a lot on the risk associated with Argentina, having Javier Milley, and I think that Manu, the access of capital, I think this is going to be, you know, really good for the entire industry. And then in the terms of the Milay's internal, well, we have this secretary of, how do you call it, and regulation, deregulation. So you have this guy whose job is to take out regulation. So we're just waiting.

You know, the other day in the space with Elon Musk and Trump, and Trump said, hey, Elon, you're my deregulation guy. So this first, Thussner, which used to be the president of the central bank, he's in charge of basically start kidding regulation, which is stopping the acceleration of Argentina. I mean, pro-business, pro-acceleration, I think this guy kind of goes in the right direction. Maybe the most conservative agenda I'm not totally, you know, aligned with.

But I think definitely he put us in the map again, you know. being in in with illomask with mark sukeber or all these guys i think that's super impressive because you don't get to know get to meet with these guys really easily and and i think you know the argentia deserves you know kind of a new new opportunity to to come back to the to the world on the 22nd of uh so that that's the next week at the time of recording is uh the regulatory and and uh There's a lot of administrators coming to Aleph to actually be here. I also just learned that Javier Milley has an actual blockchain advisor on his board. Diego, who is in charge of digital transformation, is like building a crypto app,

sponsored by the city of Buenos Aires, which is pretty cool. And I also think there's a chance that Javier Millet will also be here himself for that week here, for that day at Aleph. What are you guys hopeful for, to come out? of that day, of that regulatory day, when the crypto industry has the eyes in the ears of everyone who's writing the rules of crypto and business in Argentina. What are you hopeful? Like, how do you guys want to see progress to be made?

I can start if you guys want. I think that the regulation we have today, it's at the minimum, and I hope it doesn't change, like, most things in Argentina and they keep it that. But it allows something new, besides the new cases, which is the tax reforms. So today, like no one even understand if they have to pay taxes on crypto or not. And it's really like difficult if you want to buy a house.

Like how are you buying that? How did you have that money declare or not? So I think that it could be interesting if we take advantage of Argentina's dominant position in terms of adoption in Latam and in the world. And if we can do something like Portugal, or other states that, you know, those taxes are not going to get, you're not going to get money from those taxes anyways.

So why don't we use that and make some exemptions that accelerate the industry and accelerate Argentina as the capital crypto? So I hope that this tributary effects kind of this week is useful for that. Yeah, I have some faith into, which is sounds really weird. you're grabbing from me, but on these guys leading these organizations, because I think it's the first time in a long time, which they put people which are experts on the matter. I think the thing that needs to happen is, so I don't want to be against socialists. Socialists?

No, no, no, socialists. Sociologists. Sociologists? Yeah. Socialists. The ex-CNB guy, the head was guy from Socialist, which is nonsense. And this guy is Ricardo Silva. He's a lawyer from capital market, so he knows the actual thing.

And the same happens with the central bank. I think what Chedos said around taxation, it's key. And having, I think, also an open channel of conversation with them, which is something that has come back, it's super important because last government, last administration was a mess. You know, it's kind of, if you're a private company, you're the enemy, which is nonsense, you know. So having this, you know, communication channel open is something which is building again, and it's super important for a good regulation and good pace of business to actually happen, you know. What are you guys hopeful for out of Javier Malay's presidency or even just Argentina more broadly over the next two to five years?

Are you guys optimistic? Are you guys worried about something? What comes to mind about crypto's future in Argentina? I'm really optimistic with Millay. What I want out of Millay is that he, I mean, I trust him in that he can make like this cultural, no, social change. change in that, you know, corrupt, no, populist, authoritarian government can never come back or a party that can compete with that. I think that's for me, for me, for Millie is the most important part, you know, that cultural change.

That for me is the most important. I was going to say that maybe this is not the best for like OG crypto businesses and for the quevas. but something that is happening, I think, and you guys can correct me especially, I think that this year, if you held the pesos in a money market, was better than holding dollars.

Is true? Yep. So it's something interesting happening where even like in our company, some people are like, can I get paid in pesos? So I think this is something that maybe for the,

you know, old school crypto businesses, you know, the demand for dollars might die out. We don't know, maybe it's impacted. But in the end, it's going to be good for the country. So I think that people having more money in the long run is better for all of our companies because they have more wealth. They can use more money. They can invest more.

So I hope that his economical policies keep going and we can battle inflation finally. And, yeah, get out of this hole that we are in. Yeah, I think that, so I met, I met Javier in 2020, before he was even a candidate for the Congress. And I think the speech has been pretty much the same, which is he talks about, you know, destroying the central bank. The subtext of that is, you know, competing currencies, which I think it's awesome. But for that, you need, that means that you could pay with Bitcoin. But in order to do that, you need or whatever other cryptocurrency, you need to take out the taxes imposed right now in each of this transaction

made by whenever selling capital gains on these assets. I think competing on assets will definitely be super cool for not only the country, but also to the ecosystem because you will have more incentives to actually go to the merchant and say, hey, start accepting crypto because it's legal. Sometimes people don't do it because they don't have. have clarity in terms of what will happen. And I think that is, I think it's super interesting and it's to happen. And then, you know, time will tell.

Obviously, we live in Argentina. I'm pro-Argentina. We want to, I have a daughter. I want, you know, my daughter to be in Argentina because it's where we have my friends, my family. And I think it's a terrific place to live, a lot of freedom. This chaotic, you know, this mixture between chaos and freedom, I think, and let's say some sort of, well, Argentina, you know, it's a really rich country poorly managed, you know.

So I think if we kind of tweak a few things, we can make a really interesting place to live in. There's something interesting about Argentines and Argentine culture that I've picked up on just from the time that I've spent here is that there's a lot of people in crypto in Argentina that got very wealthy just from being in crypto. just because they got in in 2013, 2015. And they had the opportunity to go live somewhere else, go live in Mexico, go to the United States, go anywhere. But no Argentine I've really met really wants to stay away from Argentina from all that long. They all want to come back home. They want their assados.

They want their family. Yet also, all of you Argentines, always kind of like chirp at all the other Argentines about like there's a lack of trust amongst Argentines. They're like, I heard a joke recently where I can't remember who said it, but they said, if you want your crypto company to succeed, you put an Argentine at the helm, but if you want your company to fail, you'll put two Argentines at the helm. And there's something about like, maybe it's the culture of the corruption that has been in the government for so long that maybe there's a lack of trust. How do you guys see this, if crypto, as we know it, comes and does all the things that we want it to for the world, including Argentina. How are you guys hopeful that that might help some of this cultural change come to

come to Argentina? I think it's giving power to the people in a way. It's taking out all the things that can go wrong and from centralized authorities and giving the chance of people actually having that power in terms of money, privacy, life, future, your wealth, you know, whatever. And I think at least

how I see this is, if we I mean, one successful outcome of Velo should be velo eating themselves, itself, you know, cannibalizing and making every user self-custodial, sovereign individual.

How much time it will take? I don't know. Hopefully that happens. and we have a more educated people, more free, more powerful, more sovereign. That's what I see, you know. Yeah, I was going to say, I think Argentina, and I don't want to be like Argentina classic arrogance, but the things we live as a society,

I think that we are a bit advanced on the rest. Like today we're talking about how capital, control in the US could be a thing. And for us, it's like, it's crazy. And everyone, you ask, you know, a taxi drug is going to say, no, man, we already experienced that. But like a dystopia in that sense. Yeah.

Ahead of time. Exactly. So we went through the wrong path so many years that we have a society that matures and I think has an advantage compared to the rest of the world. With crypto, I think we can give them these tools, these superpowers to put Argentina in the map and to make, you know, as worthy again and Manuel's daughter

have a good future. So I hope this makes the world and are the country better. Exactly. I think we Argentinians are one of the best people in the world prepared to use crypto as a tool, you know? And that's really good for us.

Yeah, but I think it's also why, it's important why. So Argentina it's a land of heritage, Italian, Spaniards, you know, mostly Europeans, fleeing from hunger and war. And there is this deep desire to progress through hard work. And it's something I think we are kind of, you know, getting back. And it's through the private sector that you can actually do that, not through the state.

And culturally speaking also, Argentina, at least in Latin America, has been one of the lighthouse of progress in many ways. And it's not because we are superior or whatever. It's obviously not true. But I think it's that pulls that greeting to, hey, we need to succeed at any cost because we have gone through so shitty situations and we know everything can go wrong. So we kind of have that ability to actually go through and approach. progress. So I think that's one of the things that also make Argentina and Argentinians world

quite interesting. You know, Manu Federico, thank you guys for so much for coming on the podcast today and giving me a little window into crypto in Argentina. And this is my third time in Argentina over the last number of years or so. And I enjoy my time down with all the Argentines every single time. Maybe it's because of the Asato. Maybe it's because I can use USC on my phone. But there's something magical about Argentina. And so thank you guys. for being a part of that magic. Thanks. Thank you, David.