The Pomp Podcast - #652 How Crypto Will Fix South America’s Money Problems w/ Simon Chamorro

Episode Date: September 3, 2021

Simon Chamorro was born and raised in Caracas, Venezuela. He co-founded Valiu to make it easier to transfer money from Colombia to Venezuela by streamlining remittances using cryptocurrency. In this conversation, we discuss bitcoin, stablecoins, Venezuela, Latin America, hyperinflation, El Salvador, and what the true situation on the ground is from a monetary standpoint. ======================= Gemini is a leading regulated cryptocurrency exchange, wallet, and custodian that makes it simple and secure to buy, sell, store, and earn bitcoin, ether, and over 40 other cryptocurrencies. Offering industry-leading security, insurance and uptime, Gemini is the go-to trusted platform for beginner and sophisticated investors alike. Open a free account in under 3 minutes at gemini.com/pomp and get $20 of bitcoin after you trade $100 or more within 30 days. ======================= MiamiCoin, the first CityCoin, is now live! This is a community-launched program built on Bitcoin, and it’s far more than a currency: MiamiCoin is a protocol, and a platform for innovation. So, the CityCoins team is announcing something pretty cool: MiamiCoin Makers Month is a bringing together hackers, designers, and creators who are passionate about creating apps to benefit the City of Miami. $25k in total prizes will be awarded to developers who build the winning apps. And, the winners will be announced by Ryan Hoover, founder of Product Hunt, and Bored Elon Musk, everybody’s favorite pseudonymous Twitter inventor and blockchain enthusiast. Visit MiamiMakers.co to learn more and sign up to take part. ======================= LMAX Digital - the market-leading solution for institutional crypto trading & custodial services - offers clients a regulated, transparent and secure trading environment, together with the deepest pool of crypto liquidity. LMAX Digital is also a primary price discovery venue, streaming real-time market data to the industry’s leading analytics platforms. LMAX Digital - secure, liquid, trusted. Learn more at LMAXdigital.com/pomp

What's up, everyone? This is Anthony Pompliano. Most of you know me as Pomp. You're listening to the Pomp Podcast, simply the best podcast out there. Now let's kick this thing off. Simon Chamorro was born and raised in Caracas, Venezuela. He co-founded Value to make it easier to transfer money from Colombia to Venezuela by streamlining remittances using cryptocurrency. In this conversation, we discuss Bitcoin, stablecoins, Venezuela, Latin America, hyperinflation, El Salvador, and what the true situation on the ground is from a monetary standpoint. I really enjoyed this conversation with Simon and I'm proud to be an investor in the business that he's building. Before we get into this episode though, I want to quickly talk

about our sponsors. First up is Gemini. Gemini is one of those businesses you just got to know if you're in the industry. I've interviewed a number of people from their team before and I tend to think that they're taking the right approach to helping usher forward this industry. Gemini is a leading regulated cryptocurrency exchange, wallet, and custodian that makes it simple and secure to buy, sell, store, and earn Bitcoin, Ether, and over 40 other cryptocurrencies. They're offering industry-leading security, insurance, and uptime. Gemini is the go-to trusted platform for beginner and sophisticated investors alike. You can open a free account in under three minutes at Gemini.com slash POMP and get $20 of Bitcoin after you trade $100 or more within the first 30 days.

Again, you can go to Gemini and open a free account in under three minutes at Gemini.com slash Pomp, and then you'll get $20 of Bitcoin after you trade $100 or more within the first three days. Go check it out and let me know what you think. Next up is Miami Makers Month. It is a virtual hackathon for hackers, designers, and creators who are passionate about creating apps to benefit the city of Miami. They've got $25,000 in total prizes, which will be awarded to developers who build the winning apps on MiamiCoin. What is MiamiCoin? It's far more than a currency. Miami Coin is a community-launched platform for innovation built on top of Bitcoin and Stacks, the network that enables apps and smart contracts for Bitcoin. Miami Coin is generating real-world value.

The protocol has already generated over $3 million in contributions reserved for the city, and the project is just getting started. You can visit miamimakers.co to learn more and get involved. Again, you can visit miamimakers.co to learn more. miami makers month is definitely something that you're going to want to check out last but not least are our friends over at lmax lmax digital is the number one institutional crypto exchange they offer clients the deepest pool of crypto liquidity on the planet it's underscored by 100 uptime track record through volatility spikes leveraging lmax groups liquidity relationships and ultra low latency technology lmax digital is the market leading solution for institutional

crypto trading and custodial services they feature a central limit order book streaming spot bitcoin ether litecoin and bitcoin cash all paired with us dollars euro and yen lmax digital if you've never heard of them it's because they only serve institutional clients no retail lmax digital secure liquid and trusted you can learn more at lmax digital.com slash pop again lmax digital.com slash pop go check it out let me know what you think all right let's get into this episode with Simon, I really hope you guys enjoy this one. Anthony Pompliano runs Pomp Investments. All views of him and the guests on his podcast are solely their opinions

and do not reflect the opinions of Pomp Investments. You should not treat any opinion expressed by Pomp or his guests as a specific inducement to make a particular investment or follow a particular strategy, but only as an expression of his personal opinion. This podcast is for informational purposes only. All right, Simon's here. How are you, man?

Oh, good, man. Thank you for inviting me. Of course. Let's start with value. What are you guys building? What is the goal here? So in simple terms, we are a business first crypto payments solutions for Latin America. And we are focused in Venezuela, which is going to hyperinflation.

And because of that, people are looking for stable currencies, right, for new solutions. And the interesting thing is that typically vendors are the ones who set the medium and the currency that they want to accept. Right. So being a business first solution is actually an interesting way to tackle this problem because we're focusing on giving businesses a way to charge in stable coins their customers. And in a way, we're creating this marketplace dynamic within consumers and businesses. And the final objective, let's say, is to create crypto economies in Latin America. So that's, yeah. How bad is the situation? So Latin America, obviously, is multiple countries that make up this.

Do you want to talk about Venezuela first or kind of the whole region? Which one's easier to talk about? So this can be tackled from a political perspective, from an economic perspective. I think that we can talk about Latin America as a whole, because our objective in the end is to serve the entire region. But Venezuela is kind of the initial market, so whichever way. Okay, so let's do Venezuela first, then we'll talk about kind of the entire region. Everyone knows Venezuela has gone through hyperinflation. It used to be the richest country in the region.

Now it is not. And it feels like those who could leave have left. and there's some folks who just can't leave for whatever reason, so they're stuck there. How bad is the situation on the ground? And what do you see on a day-to-day basis around the currency or other businesses? Yeah. So the situation is really bad. It's been bad for 20 years.

We had a dictatorship, a narco state. The Venezuelan regime is sanctioned by OFAC. They all have prices on their head, right, by like the FBI. And they have control of everything. They have total power. So a good example to like try to bring people from the U.S. to what it is over there. So the minimum wage is $1 currently in dollar terms. And some years the price inflation gets up to 10,000%.

So, yeah, in 2019, it was 10,000%. So imagine trying to live with $1 a month, right? Like 12 months a year, $12 a year, and 10,000% price inflation. How do people do it? I don't know, man. Like, it's really hard. Like, people are starting businesses. There's a lot of entrepreneurship.

That's kind of like one of the brightest sides of things. There's a very entrepreneurial vein, I would say. And because you can start selling food, arepas, like cakes to your families, to your friends. So you have this like hyper local communities of people selling goods and services to their community. And everybody sells to each other. So that's a way some of these communities are like maintaining themselves. And more recently, since 2019, the country started to get dollarized, informally dollarized. which means that there's no direct relationship with the Fed.

It's a dollarization that is coming in cash and that is coming through unknown sources. And so you have kind of like these elites having stability, and that stability within the elite spreads through the kind of like people around them, right? um so um that's another way people are kind of like getting by um so slowly the country becomes more and more dollarized uh even though there's not this direct uh relationship and also it's a country but as simple as somebody came to the u.s they got ten dollars in their pocket they go back

now they have a ten you know ten single dollar bills and then they spend it and it gets into the economy there's like very low level examples and i'm sure there's very complex ways that dollars get into the economy which i don't want to go there um but there is some dollarization for the average person in venezuela right now as they watch and as you mentioned in 2019 ten thousand percent inflation what currency do they want do they want boliviar they want dollars they want gold they want bitcoin they want uh the euro like how do they think through the evaluation of their options given that their currency is basically being destroyed right before their eyes Yeah. So, for many years, they haven't been wanting the bolivar, the local fiat. And in 2016, 2017, there was a small, especially in the young population, but Latin America is quite a young population in general.

and people were starting to adopt Bitcoin mainly in peer-to-peer exchanges that was kind of like the main way to do it and because dollars were not an option in Venezuela specifically while Latin America is highly dollarized and you know Argentina you have access to dollars Ecuador is fully dollarized El Salvador you have access to dollars but in Venezuela that was not an option so at the time crypto was the only option when the country started to get dollarized and because of the fact that dollar the dollar is trusted by most people outside of the united states um everybody started to want uh the dollar specifically because bitcoin uh price volatility currently is too much to sustain for people that can't save essentially they don't have the ability

to save they need their money because they don't make enough and then their expenses there there's basically no delta if i make the equivalent of five dollars and my monthly expenses are five dollars i have nothing to save right that that's why they can't save exactly which is an opportunity actually uh because um the there's um the the middle class is actually decreasing um recently there was an article that sequoia launched that says a rising middle class in latin america there's a bunch of buzz around Latin America, the reality is that it's not rising, it's decreasing. And the reason why it's decreasing is because there's multiple reasons why that is decreasing, but a good solution for that is lending.

Lending money to small businesses and medium businesses that have been squeezed by the large businesses in general. There's a huge wealth inequality. And so if we land in stable currencies, such as the U.S. dollar or in stable coins, people are going to have the ability to save, especially if those savings have interest bearing yields. So that's a huge opportunity for crypto companies to kind of like help the middle class grow. And so, yeah. And when you think about what you guys are doing, explain how you're giving people dollar exposure in that country. So we essentially give them a digital dollar and people, the way they see it is a digital dollar.

They don't really care if it's a stable coins in the back. What we do is that we partner with Fireblocks, a company from Israel, and we essentially back our value dollar. We call it the value dollar, which is an IOU. It's centralized. and because of the fact that it's centralized it allows for people to send it to each other at no cost it's not like on-chain transactions because our objective right now is to prove that people and businesses at large like in the economy they are going to be able to transition fully to a dollar-based or like digital dollar economy once that problem is solved which is much harder

than just creating a token right most companies just create a token and then they figure out oh Let's see where can we put it. For us, it was more interesting to figure out how can we make people and businesses trust in this digital dollar. How can we make them use it every day? And so we essentially created this IOU backed in USDC in fireblocks.

And once we reach critical mass, we may think about, hey, let's now just give them exposure to this token, which is going to be interchangeable for any other cryptocurrency that they want. And how is it going so far in terms of the, and I should have said this up front, I'm an investor in value, so I'm a very big believer in this. But how is it going in terms of getting the merchant adoption? It's been really good, actually, yeah. So an interesting thing that I'm going to allude to really quickly is that we started with remittances to Venezuela because we now have about 6 million migrants, 6 to 7 million migrants.

This is about one in three Venezuelans or one in four Venezuelans have left, migrated. Wow. These people are typically 18 to 40-year-olds, the productive class. And the people that are staying are younger people in high school or older people that are not working as much. So our hypothesis was, you know, these people are going to completely depend on remittances. Let's help the people that are migrating send stablecoins rather than send them bolivars, which is the hyperinflationary currency, which is what's already happening at large. Venezuela became the second largest remittance recipient after Mexico in the entire region.

And Mexico, of course, holds the number one place because of the US corridor. And so that was our hypothesis. Let's dollarize Venezuela through remittances as a vehicle, using kind of like crypto as a bridge we realized that we could do it immediately immediate remittances because of the fact that it's on crypto um we could do it um on stable currencies which is a stable of remittances but the price it's actually not great because when you want to send um use money you remittances using crypto as a bridge you have to go through the on and off ramps and you have to on ramp from fiat in the country of the sender and you have to off ramp in Venezuela because people are not using crypto as a means of exchange and it's not being used

as a unit of account in the country so you end up paying six percent in the on and off ramp fees one in one country and the other one three and three and that's not super effective compared to like Western Union and other systems. So we realized that remittances can only be effective in crypto if the recipient country uses crypto as a means of exchange. So we've said to ourselves, let's refocus the entire business and to help businesses use this product.

And it's going really well. We changed this this year at the beginning. And now we have a business account and a personal account very similar to Venmo here in the United States. It's just backed in stablecoins. And we're signing up about 150 businesses per day. And out of those 150 businesses, 50 of them are getting to the aha moment, like experiencing

the core value of the product, which is protecting themselves from inflation. They're buying stablecoins with their bolibars, or they're charging their customers with bullet bars. So it's working, it's working really well. And our entire focus is to focus on retention because in reality, as I mentioned before, technologies change, right?

Like they will continue to change. So for any form of money, retention tells a pretty clear story on if people really trust in this product. So so now that's what the entire focus of the companies is on retention for businesses. Yeah. What questions you guys got? When you're kind of on the ground, right, and you're talking to some of the people that live in these countries and Venezuela and others around there, what are you hearing from them in regards to how they feel about crypto specifically versus kind of the traditional assets or currencies that they're used to?

It's interesting because initially in 2017, we're getting to the point where crypto already is an unstoppable force. It's already too big. Everybody has heard about it. And in 2017, it was kind of like the Bitcoin adoption. Then we got dollarized. And because of the fact that the dollarization is informal and it's highly inefficient because it's in cash, people don't have change because the cash bills are limited.

You don't have ones and fives. People have like 20s and 50s. So there's a bunch of problems with this dollarization. So people are turning against again to see, OK, what are the other forms of money like stable coins? And they're now more interested in Bitcoin. They're asking us a lot about like, hey, can we can we get Bitcoin in value? So I do believe that stable coins is the best segue to other cryptocurrencies and sound money as Bitcoin. Bitcoin, but the trend is looking better now towards what people think about Bitcoin.

And in general, in Latin America, what's interesting is that we've been studying how people use crypto a lot. We've been trying to solve hyperinflation for four years in the company. And most of the volumes in Latin America, which actually are not very large in terms of global like we only hold like seven percent of the global volumes one of the lowest regions but most of these volumes happen in peer-to-peer exchanges and they happen in re through retail and what we're seeing is that people are trying to use crypto not as a speculative asset to trade but actually to pay to protect themselves from inflation to save

um which is an awesome opportunity because it really those are the properties that money serves that cryptocurrencies should serve um and so yeah i'm highly highly um positive about uh the future of crypto in that time yeah it's great and then it seems like the goal is to replace their current currency which is the the boliviar is that how you say it um can you talk about like just the digital switch that venezuela is seeing from kind of that cash perspective of handing over the 20s and the 50s versus using any type of digital 20s and 50s he said there's no ones and fives yeah so can you just talk about like the digital switch and how um like how important is that obviously to when you're trying to go to a stable coin or bitcoin and use that as the currency

yeah so the that's that's a good a really good question so i'm gonna really quickly talk about the dollarization in Venezuela. So there's two ways. The first one is cash, which you just mentioned. The second one is that Venezuelan elites, most of the elites, have been flying to the United States, opening bank accounts here, getting offshore accounts. And now they're using Venmo, sell the Interbank app.

And they're going back to Venezuela. And they're kind of like exchanging goods and services with each other, paying with cell and Venmo. And it started with the leads and now it's spreading through kind of like the, I wouldn't call it the middle class, but like other entrepreneurs and things like that. And so these are people who go open up US-based bank accounts, come back to Venezuela, and then they're transacting, but it's in the US-based accounts rather than in the Venezuela accounts.

I think there's an economic theory called the milkshake theory, which is like, you know, the United States is such a large power that it's basically sucking in a few other economies. Like people and businesses and emerging economies want to transact and have dollars. So this is a perfect example of that. And it's happening at large. And another thing that is happening is because we have a large migration, especially now in the U.S. Recently, the United States announced that all the people that were living here that are Venezuelan are going to have a really easy way to become residents. And you can also get like political protection because Venezuela is like this crazy place. And so you have a bunch of migrants from Venezuela here, actually in Florida.

And these people are renting their cell accounts. They literally rent them to people in Venezuela. And people in Venezuela are paying up to 30% to use a cell account. Wow. So, of course, that translates into higher prices. And so that's a way people are kind of like moving into the digital dollar economy. And it's becoming like a trusted way of doing it. The cash dollar economy is very interesting because, as I mentioned, people don't have cash.

and because um so if i go and pay in a in a supermarket and the product is worth eight dollars eight and fifty cents um the supermarket um prices is at ten dollars because they don't have um they don't have the ones and the fives but i need my one dollar and fifty cents because it's a lot of money in venezuela so i end up not buying and it you know reduces kind of like commerce and so and then the supermarket says oh i'll give you uh your um change in bolivars but i don't want the freaking bolivars um so it it just has a bunch of loopholes and um but i'm again i'm really positive of like the path to stable coins because of this specific dynamics that i just mentioned um people see stable coins as digital dollars period um and they see the benefits of it

they see that they can pay in exact amounts they see that they can hold it in their phones they don't have to carry large amounts of cash businesses sometimes do like they have to pay their providers in cash and their providers charging large amounts of cash in dollars and so sometimes they have to drive uh from state to state with a bunch of money and they're just like scared all the time so you don't know this but now you do i carry this in my wallet this is a 50 boliviar right yeah i also carry in my wallet this is a 10 billion dollar zimbabwe currency so 50 10 billion um both worthless uh how many of these do i need to pay for things in venezuela so there's only 50 there's a really good picture on google if they want to look it up

we have we have the picture i think chicken where's the chicken with the with the uh boliviar we'll we'll pull it up here in a second yeah how much is a chicken so it changes all the all the in time like is it true that the the prices in the stores almost change in like near real time that they have like these digital prices and they basically just can change them as the currency changes at one point in time that was happening like you would go to the store in the morning and in the middle of the day was a different price and that was a different price sometimes they even didn't have details so the the store owners would have to like just change it by hand or whatever and it was crazy find out the price at the register yeah

just find out the loaf of the bread when you get to the register. Yeah, it was definitely crazy. Now the inflation of prices is not as crazy as it was at one point in time. The past three months, the inflation in prices has been about 22% during a three-month period.

It's crazy that that's not bad. No, that's really good for Venezuela. I was just looking up the numbers earlier And it says that, so there was certainly what you said earlier about 10,000% in 2019, but it says since 2016, the overall inflation rate has increased 54,000, no, yeah, 54,000%. There's a really interesting way to explain this, which is the $1 today is 4 million boulevards. Sounds like a lot, but there's a lot. Oh, that's the chicken, yeah. yeah pull it up to buy that chicken that's how many boliviar you need on that day it changes

yeah to buy it that is a wild photo yeah that you literally need twice the space to carry the cash there to buy it than it takes to carry it home yeah so so now you see bolivars in the streets like um just thrown in the streets you see people doing like handbags with it because it's paper right and it works for art and for other things so people are trying to like make uh make the paper worth something um because the the nomination is worth nothing so going back to the four million thing let's just so one dollar is four million bolivian four million bolivars in october 10 i think we're going to the government is going to take out uh six zeros out of it and um and so the one dollar will be for bolivars um so

i'm laughing because this is so fucking absurd yeah but the venezuelan government says one dollar equals four boliviar we're gonna make it or i'm sorry four million boliviar we're gonna make it one equals four so we're just gonna slash the six zeros off and pretend they don't exist exactly this is the third time they're doing this to control uh inflation but it's really just like a way for people psychologically to yeah psychological and i guess uh it's a way for them to give strength to the to the bolivar because now people are going to be able to use cash they're potentially going to print some some some some bills. It's going to quickly and rapidly go back to millions, which has already happened. But this

is the third time they do it. They've already taken eight zeros, five in one opportunity, three in another opportunity. So in reality, when we're talking about one dollar, we're talking about four plus 14 zeros. And if you can correct me, I believe that's $40 trillion, $40 trillion dollars or 40 trillion bolivars per one dollar. And yeah, that's that's the inflation where we're experiencing. So it's the ideal breeding ground for new new forms of money. It is nuts to me how bad the situation is. If Venezuela had been Bitcoinized, would any of this have happened?

Like, is it simply a monetary policy, just undisciplined? We can get rich if we print a bunch of money. So we're going to do it. You enrich the government. Yeah, no, I'm definitely of the train of thought that like Bitcoin fixes this for sure. And the only the only kind of the only problem is that to get to the Bitcoin standard, as I mentioned, We need a rising economy and more wealth generation being created so people can save, so people can invest, etc. So it's as simple as like give people in emerging economies stable coins to level the playing field and then give everyone Bitcoin.

That's the master plan, really. Yeah. And then what about the other areas in the region? So Venezuela, people can feel it. Like, it sucks, right? It's a horrible situation. You guys are doing a great job of trying your best to provide a currency that doesn't get devalued, trying to get it into people's hands, educate them, etc. What about the rest of the region? What's the situation?

The situation is very interesting because Colombia, Peru, and, for example, Chile were countries that were smaller in GDP. And the past 20 years, they have been increasing because they were just like really small. Brazil, in the contrary, was already a big economy, but it's decreasing, similar to Mexico and Argentina. So the reality of Latin America is that the middle class continues to decrease in growth. Wealth inequality continues to increase. Currency instability is happening in every Latin American country. So price inflation, for example, in Colombia and a few other countries is not as bad. But the currency depreciation against USD or other stronger forms of fiat is really bad in Brazil and every country.

um so fiat currencies tend to have really low network effects in in latin america like nobody wants them and um so the the opportunity for for latin america as a whole and and again if you look at the the on-chain data um a lot of the on-chain data is showing that um the appreciation of usd of the currency against USD relative to the usage of crypto in peer-to-peer exchanges is highly correlated and so I do believe that all the problems in Latin America like the foundational problem we have to solve is solving money yeah commerce is still at six percent online commerce which is not not super high but the good thing about Latin America so I've been talking about all

the shit the good thing about Latin America is that we have an established middle class is decreasing in growth but it's more established than India or other regions we have a GDP that is twice the size of India a population that is twice the size of the United States an internet penetration that is is higher than China and India at 70%. One of the highest engagements of internet usage in the world at nine hours per day. So, a relatively young population.

So, the only problem we need to solve is the freaking money problem, because- It's basically people are online, they know how to use the tools, you have a young, large population, it's growing quickly, the problem is they don't, the money is wrong, it's bad. Exactly. So that's kind of like the general situation

down in Latin America. And another cool stat is that in the past six months, VC money has increased a lot. I think $9 billion were invested, or even more than $9 billion in VC money in high-risk startups that are solving these type of issues. We have about 2,000 unicorns, about 24 unicorns, which is kind of like new for the region. And out of those 24, about three are crypto startups or exchanges.

So 24 unicorns in Latin America, three are crypto. Yeah. It's pretty big. It's pretty big compared to other regions. So hopefully we're going to see more of that. Value will be a billion dollar company. Of course. Let's go.

Of course. It's a winner take all. Crypto economies. Yeah, sure. What do you think about El Salvador in terms of them? Obviously embracing Bitcoin? Mostly would just hear the Western perspective at the North American perspective of just hey Bitcoin is good. El Salvador is embracing it. How do you think about the way they're doing it the fact that they're doing it? What were your thoughts? Yeah, so the the law is going into effect in about five days, right? I think I am not like super into the whole like political regulatory thing and like reading the laws and all that.

I'm kind of like more like 10,000 feet above that. And what I can say is that interestingly enough, Bitcoin is being adopted first by dictators. And in Venezuela, it's similar. There's nothing we can do about it anyways. Bitcoin is open, right? Which is an interesting thing, right? Nobody can do anything about it. If they want to use it, that's okay.

It's an open system that is not controlled by anybody. But in El Salvador, I think just because your listeners potentially are mostly American, And I really just wanted to say that it's really easy to kind of, like, be excited about this if you haven't lived through the bad things that have been done by these people, right? If you really don't know the history. El Salvador is not Singapore, right? Like, they're both dictatorships. and you know it's great that you know a dictator can say hey now everybody will use bitcoin because i say so but again it's a very different thing from doing that in singapore where there's like

wealth and one of the highest gdps per capita compared to el salvador which is highly poor and the entire power is controlled by their their brothers and this guy so i am i am interested to see how this will happen but i'm highly skeptical of uh bitcoin uh being good as a whole i think there's just like like similar to venezuela we had the first um regulatory entity in latin america for regulating crypto it's now happening in cuba and across like the board you can just see that these laws are made are not necessarily to help people but to like make money um and so you know i'm just dropping some like real facts here yeah um what do you think are the important things for people to pay attention to as it gets rolled out are there specific things that you

would say hey you know these are going to be the ways that we know whether this is a net positive of our net negative? I think we're going to have to see some on-chain data. The solutions that are there, I think, strike. I think the Salvador government is launching their own wallet. I don't know if that wallet is going to be. I think it's built on top of Lightning Network. But there's another interesting kind of, I guess,

moral thing, right? Like, they're highly KYC people, but in the end, I do believe that it's better to give people optionality to have Bitcoin than not having it. So it's better to have it with KYC than not having it at all. Things to pay attention to? I think, yeah, we're just going to have to wait and see. will be waving my magic hand here it's just like it's it's uh after living i lived in hyper

inflation myself in venezuela and you know and what did you do when you're living through hyperinflation like what do you do um i was very young at the time so um and so what the first thing you start to do is try to get your money out of there so my parents started to for example invest in real estate outside of venezuela that's the only thing they knew kind of how to do and just start thinking about like getting the hell out of there out of the country it's out of the country um because hyperinflation is just a byproduct of total mismanagement of the monetary policy and the country in general so but while you are there people tend to spend all their money which is interesting like people don't have like

saving it starts to become something less interesting and when you don't have access to other stronger forms of money which happened in the early stages of inflation in Venezuela 2010-20 from 2010 to 2015 people would just spend their money they would rather go and uh go to a fancy restaurant or spend or buy a bottle of rum um instead of just keeping their cash um so yeah it creates behaviors uh that are not good for um for for people and you know yeah it pushes people to have those uh bad uh financial behaviors it's crazy what uh you guys have any other questions no that's one person crazy someone asked uh someone in the chat asked that I thought was really interesting.

What is the medium of exchange? How are people, as two friends, and they want to exchange money, how are they doing? Are they using those Venmo and Zelle apps, or are they using the Boliviar with cash, or are they trying to use, how are they interacting with each other? Yeah, so it depends.

If you are in the 1%, you use Venmo and Zelle, for sure. If you, you can also use cash, cash dollars. It's being used a lot. A lot of the people from the 1% fled to the United States, opened a bank account, get as much cash as they can. Sometimes they even fly with more than $10,000, which is a legal thing. They just take all the cash possible to Venezuela

that they can. So yeah, cash is also used. And, but I do want to mention something interesting, which is we do, we have a product in Venezuela, interbank product called PagoMovil. PagoMovil is like sell in bolivars. And people that are not living in the capital, which is Caracas, use it a lot.

80% of the transactions that our businesses are reporting that they are receiving through PagoMovil in bolivars, is still, they're still using the bolivar, just a digital form of it. And you still see that trend in the hoods, or let's say on the less wealthy neighborhoods of Caracas, which is basically most of Caracas, of the capital. And so a lot of people still use Bolivars.

Businesses are getting paid in Bolivars at 80% of their transactions. So they do have a treasury to manage in hyperinflationary money. And again, that's another opportunity we're trying to leverage on and just kind of like help all these businesses start to adopt stablecoins and ETH dollars. Hey, good luck on that. I got two questions for you, then we'll wrap up. First one is, what's next for value? As you guys continue to build, what's kind of the plan moving forward?

And how can people who are watching this help you? Yeah, so currently we're focused on the lower hanging fruit, which is SMEs, small and medium sized businesses in Venezuela who don't have access to any form of digital dollars. The larger companies, retail companies, huge, they do have access to U.S. banking. So we're focused first on this group. And after that, we're going to start focusing on the larger retail businesses, because while they do have access to USD, they have all these issues that I'm not going to get into right now with their treasury that we can solve with like crypto infra and like stable coins. So once we start tackling the large businesses, we're going to have a vertically integrated payment supply chain, which is kind of like the checkmate for retention for this currency for a new type of money. When a business that is receiving payment from their customers in stable coins can also pay their providers in the same stable coin.

And so that's kind of like what's going next for us. And after that, we're going to start thinking about monetization. And that's when we start to think about how can we lend to people. We're going to have enough transactional data to create risk models. So we're going to start lending, ideally increasing the middle class. We can start providing interest-bearing accounts. And once we have this kind of like, we're going to be able to monetize in multiple ways. Once we have this in place, we're going to start to think about Brazil.

Argentina and Mexico and that's how we plan to win in Latin America basically I think you're going to do it last question what do you think Bitcoin's price hits by the end of the year we're sitting around 50,000 right now

what's your end of year Bitcoin price prediction let's say 100k 100k so we go from 50 to 100k by the end of the year if Bitcoin hits 100k by the end of the year what changes in latin america for people with bitcoin is it just seen as an investment in people who are holding bitcoin obviously it appreciates they're excited uh does that change the way that people

think about it adopted or nothing changes oh yeah it's definitely going to continue to uh increase trust which again trust is it's everything in any form of money um is going to help a lot of people that have exposure to bitcoin and that are not necessarily wealthy most of the people that are of crypto and Bitcoin are like middle class and elites, but you still have a portion of people that are kind of like poor that have somehow adopted Bitcoin. So if that happens, it will continue to take some people out of poverty, which is awesome. And and I think that what I really want to see is like at one point at one point in time, is Bitcoin going to be what is the floor of volatility?

And if the flow of volatility starts to reduce every time, you know, there's like a bull market or a bear market when the bear market hits the bottom. If it's less of an aggressive percentage over time, it's going to be seen as a more or less volatile currency and in turn is going to be used for like payments, ideally with Lightning Network and those things. So yeah. It feels to me like Latin America, the statue laid out with the Internet penetration, just the unbanked population. And then also this like macro tailwind of a really bad economic situation naturally forces people to look for other alternatives.

And so whether it's the stable coin, whether it's Bitcoin, just these rails, this industry, this technology ends up pretty much capturing people's imagination. Say, yes, this is the solution. Yeah. Right. Yeah. So it's pretty cool. Where can we send people to find you on the Internet? um twitter uh simon value so value is uh v uh a l i u and um same on instagram and uh you can log up value on on my profile as well um and find us there the website is in spanish i think and all these things are in spanish but uh yeah i'm putting your uh for anyone who wants to follow him i'm putting him uh right now in the chat his uh twitter account so make sure you go follow him uh and you're actually linked i think is the slash en right yeah slash en so they'll get it

in english rather than uh than me who i type in value and i always get it i have to remind myself that uh while i live in miami and miami is uh uh arguably the actual uh language of uh of miami um they're spanishes i can't uh i can't speak it so john's working on it i'm getting closer right yeah um all right man listen thank you so much for doing this i think obviously the the problem is really really bad uh in latin america venezuela specifically and i think there's you know millions and millions of people who can be helped so keep going and i'm excited to be along for the ride thank you man