Bitcoin set to take on Argentina's peso as new exchange launches in Latin America
2 June 2014 11:44am
Bitcoin and Litecoin exchange Bitex.la has made its official launch, with the intention of being Latin America's "first regional exchange".
Bitex.la boasts users in Colombia, Mexico, Spain and the US, but hopes to expand to more countries in the near future.
The Buenos Aires-based exchange will also be providing services in Argentina, widely touted as having suitable conditions for Bitcoin growth.
An unstable currency and booming blackmarket demand for US dollars have created an opportunity for Bitcoin entrepreneurs to gain a significant foothold for the industry.
With inflation running high, many Argentinians are seeking alternatives to government issued currency. While it is true that Bitcoin itself is susceptible to bouts of volatility it cannot be systematically devalued by a central bank.
Alan Safahi, CEO of cash-to-Bitcoins, recently told digital currency new site Coindesk: “We see a lot of pent-up demand for Bitcoin in Argentina. I was there a couple of months ago – people in the streets come up to you and try to convert your dollars into Bitcoin.”
Bitex.la is hoping to establish itself as a trusted digital currency and banking alternative to the status quo, according to Coindesk. The exchange has received $2m of financing from a UK investment firm, with the company saying it will provide the capital needed to follow through with the project.
"We’re going to [be] launching a trading API in the following months, and we’re investigating and trying to set up better ways for people to fund their accounts, so most of the money is going to go to new markets in Latin America", said chief operating officer, Francisco Buero.
However, Bitcoin has not received a universally warm welcome. Last week, Argentina's central bank issued a statement warning the public of the risks of cryptocurrencies and their potential for criminal activity.
“Internationally, however there is still no consensus on the nature of these assets, various authorities have warned of [their] possible use in money laundering operations and various types of fraud", the statement concluded.
Since there is no clear regulation of Bitcoin in Latin America, Bitex.la is incorporating in Holland to protect itself from the unpredictable whims of regulators.
Furthermore, Bureo hopes this will give the company the ability to negotiate with the authorities in each market differently. Bitex.la is also seeking to simplify how users interact with its website through the use of payment processor Astropay.
Astropay has in the past provided similar services to failed Bitcoin exchange MtGox. The company is also taking measures to counter problems of theft and fraud encountered by other Bitcoin exchanges. Bitex.la will keep deposits in cold storage and will be using AES-256 cryptographic encryption.