Contxto – As Latin American consumers further explore crypto possibilities, yet another startup has raised funding to launch abroad.
Revealed earlier today, Bitso, the largest Mexican cryptocurrency exchange, landed an undisclosed amount of capital from investors, led by Ripple. Other important funders include Coinbase, Jum Capital and previous investors, Digital Currency Group and Pantera Capital.
According to The Block, the use of proceeds will mainly concentrate on expansion efforts to Argentina and Brazil. Both countries represent not only big markets but ones with great retention and usage of crypto assets. Other undisclosed Latin American countries are also reportedly on the startup’s radar.
Founded in 2014, Bitso helps both banked and unbanked make blockchain and crypto transactions. As of today, the company reportedly has 750,000 active users.
“The region is ready for disruption and we want to be the ones to do so by radically advancing financial inclusion for everyone,” said Daniel Vogel, co-founder and CEO of Bitso.
The history between Ripple and Bitso goes way back. For instance, Bitso’s liquidity provider function was crucial for RippleNet’s U.S.-Mexico corridor. Earlier this year, Ripple also launched On-Demand Liquidity (ODL) features with MoneyGram for Mexican users. Bitso was an important exchange partner in this initiative.
This past July, the Mexican platform Bitso also requested an international cryptocurrency license from Gibraltar Financial Services Commission (GSFC) starting August. With this, the commission would oversee Bitso’s custodial service and transactions such as withdrawals, deposits and trading.
GSFC uses a specific structure to regulate businesses that serve as distributed ledger platforms.
Crypto in Latin America
As a highly troubled region in terms of financial inclusion, crypto has come to solve many issues for consumers. For example, Argentina’s inflation is one instance where crypto yields many benefits, such as preserving one’s purchasing power.
As Contxto previously reported, Latin America is one of the fastest-growing regions for crypto users.
“We believe that regulatory compliant fiat-to-crypto gateways around the world are an essential element to digital assets becoming a new global money transfer rail,” said Peter Johnson, principal at Jump Capital, on participating in Bitso’s investment round.
Now, Bitso’s strategic growth also comes at great timing for Ripple. This is especially true since the latter recently launched operations in Brazil to reach a wider South American userbase.
In June, Ripple also launched operations in Brazil to expand its South American footprint and offer cheaper cross-border payments.
“Bitso is a key infrastructure partner to Ripple, providing critical liquidity for payments in Mexico,” said Asheesh Birla, SVP of product management at Ripple.
“The team has built real products and amassed a huge customer base in Mexico, and we look forward to partnering with them in this next stage of growth into Latin America.”