China and Latin American Businesses Helped by Bitcoin Technology – Bitcoin News


China and Latin American Businesses Helped by Bitcoin Technology

As the biggest Chinese currency intervention ever sends shock waves to markets around the world, trade between Latin America and China continues to increase exponentially. Concurrently, small and medium Chinese and Latin American entrepreneurs are working actively to make Bitcoin and the blockchain technology successful.

Also read: Bitcoin: A Golden Ticket Around China’s Capital Controls

For these entrepreneurs, Bitcoin technology is seen as a savior. Specifically, small and medium entrepreneurs need this technology to tackle ever-increasing government regulations, wild currency fluctuations, exorbitant financial fees, and potential upcoming currency battles.

Help for Small and Medium Businesses


Hence, a startup company such as BitNexo was created. BitNexo offers a platform that uses blockchain technology to help small and medium businesses perform financial transactions between Asia and Latin America quickly, securely, and with low fees.

BitNexo is based in Shanghai and Santiago. Recently, BitNexo won the BBVA Open Talent Competition for its solution to the problem of simplifying cross-border B2B payments between Asia and Latin America with Bitcoin technology. The BBVA Open Talent Competition looks for innovative FinTech projects, and related ideas, that contribute to the industry’s evolution and transformation, such as big data, security, e-commerce and others. Finnovista and BBVA hosted this event in Mexico City on September 10, 2015.

bbva-open-talent-2015-ganadores-latinoamerica-bitnexo-destacame-chileMr. Darren Camas, CEO of BitNexo, told

“We currently use the Bitcoin blockchain’s most basic functionality: global, low-cost value transfer. We have built a product where the end user doesn’t interact with the underlying protocol so simple that the end user may not be aware they’re using Bitcoin. Bitcoin has a huge education hurdle, which is why we’re giving the end user easy access to the technology.”

Trading with the Roaring Dragon

elson1In 2013, China exported goods worth more than 2.2 trillion dollars and imported about 2 trillion dollars. A substantial portion of this trade was with Latin America. The International Monetary Fund reports that “bilateral trade between China and Latin America has grown exponentially since the early 2000s—from $12 billion in 2000 to $289 billion in 2013 (see chart).” It is worth noting that the Chinese yuan is used in over 80 percent of Bitcoin transactions, according to a Goldman Sachs report.

The South Cone and China

Santiago, Chile
Santiago, Chile

As an example of the strengthening of Chinese and Latin American business relationships, let’s look at Chile and Argentina. China and Chile signed a Free Trade Agreement in 2006. This agreement aims to eliminate trade barriers and facilitate the cross-border movement of goods between the parties; and, to promote conditions of fair competition in the free trade area. Likewise, a Free Trade Agreement between Hong Kong, China, and Chile was signed in 2012. As a result, within this context, the bilateral trade in goods between Hong Kong and Chile had an annual growth average rate of 6 percent, from 2009 to 2013. While with China, from 2002 to 2014, the average annual growth rate of bilateral trade grew by 24 percent.

Similarly, across the Andes, Chinese investment in Argentina continues to surge. China is now Argentina’s second-biggest trade partner, its biggest destination of farm produce exports and its third-biggest source of investment. Presently, China and Argentina are partnering at developing oil and gas projects as well as building dams in Argentina.

In July 2014, a massive currency swap deal was signed between China and Argentina, allowing Argentina to boost its reserves by $400 million USD. And, in line with the purpose of internationalizing the Renminbi, this month, China’s central bank authorized the Industrial and Commercial Bank of China (ICBC) as the renminbi clearing bank in Argentina. The purpose of this decision was to facilitate the use of the yuan when performing financial transactions between China and Argentina.

Currency Issues

Buenos Aires
Buenos Aires

As a result of the yuan devaluation in August, the dollar soared, dramatically decreasing the value of both the Latin American currencies, further destabilizing the economies of the region. For example, in Chile, the dollar reached its highest value in 12 years (CLP 707 per dollar, on August 24th). In Argentina, the difference between the official and black-market exchange rates surged to over 70 percent.

Some even fear that a currency war looms over the horizon. In effect, “China’s surprise decision to devalue its currency — the yuan — this month by around 3% has sparked a wave of financial market volatility and re-kindled fears over another round of tit-for-tat competitive devaluations. The so-called global currency wars are back,” says Richard Iley, chief economist for Asia at BNP Paribas.

However, in spite of this dark and ominous scenario, Bitcoin and the blockchain technology continue to make progress and expand. These technologies are enabling startup companies, such as BitNexo, to help small and medium businesses perform financial transactions between China and Latin America, quickly, securely, and with low fees. BitNexo’s Latin American expansion plans include Mexico and Brazil.

Do you think the future of Bitcoin lies in China? Let us know in the comments below!


Tags in this story
Argentina, Bitcoin, Chile, China, Currency Wars, South America, Yuan

Images courtesy of Imgur and Pixabay.

Julio Gil-Pulgar

Julio has worked for Fortune 100 companies and the United Nations. He has led projects involving IT, operational, and compliance audits, in the U.S. and throughout the world. His expertise is in IT engineering, risk management, and security. He is a Bitcoin enthusiast.

Show comments