Blockchain Summit in Panama: Latin America seeks to capitalize on its strengths in the crypto industry

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Despite inflation and changes in monetary policy in the United States that have negatively affected investment, Latin America continues to lean towards the use of cryptocurrencies as a way to achieve greater financial inclusion, and is emerging as an attractive region for the advancement of blockchain technology.

Among other things, this seems to be ratified by the more than 1,200 people who attended the Blockchain Summit Latam 2022 in Panama, which sought to highlight the region as one of the most friendly to blockchain technology in the world, where countries such as El Salvador or Panama may emerge in the future as a crypto hub.

Although there are eloquent data, such as studies that say 51% of Latin consumers have made a transaction with cryptocurrency in the last year, it is more impressive to see hundreds of participants from all over the continent gathered at the Blockchain Summit Latam, which in its sixth edition – which took place between July 6 and 8 – served as a platform to promote learning, analysis and identification of opportunities for the use of blockchain technology.

The event was held in Panama City, which became the blockchain capital for a few days (July 6-8), with more than 130 exhibitors at the new state-of-the-art Panama Convention Center.

“Part of what we’re doing with this event is that everyone can meet and connect,” said Cristobal Pereira, CEO of consulting firm LatAmTech Finance and overall organizer of the summit. “To live the experiences and, in a certain way, to visualize the possibilities that this technology provides for Latin Americans.” For Pereira, the volumes of cryptocurrency transactions in the region are increasingly exciting and deserve more events like this one, where, he said, around 250 business meetings were recorded.

Considering that research firms such as Triple A and Grandview Research estimate that the blockchain sector will grow globally by 86% between 2022 and 2030, it can be said that we are seeing the first steps of an industry with endless possibilities. And if we also estimate that LatAm concentrates the largest number of cryptocurrency users worldwide, the future looks promising for the region and platforms like this one.

CJ Rinaldi, CCO of Blockchain.com, stated at the event that the past two years have seen a massive expansion in the crypto sector worldwide and that he considers Latin America to be a market with significant growth due to the impact of factors such as inflation, political instability and distrust of banking institutions have on the population.

“Latin America has 200 million unbanked citizens who turn to crypto as a store of value, safe and stable, and an entry point to financial freedom,” Rinaldi said after recalling the cases of Argentina and Venezuela, where the use of cryptocurrencies has grown significant. in the face of the fragility of their local currencies. “Latin Americans are progressive and innovative when it comes to adopting new technologies, and we only expect the numbers to grow.”

Maximiliano Hinz, Latam director of Binance (one of the largest crypto platforms in the world), for his part, emphasized that the use of this technology is not limited to digital currencies: it also has an impact on traceability processes, logistics tracking, digital art and control of processes and shares, across the continent.

Panama, a possible hub for the region

That the meeting was held in Panama was no coincidence. It intended to give prominence to the Isthmian nation for the critical promise they are making to the blockchain ecosystem and the use of cryptocurrencies in recent years, shaping itself as a possible crypto hub in the region.

“The possibility to export services, and since the currency used by Panama is the dollar, makes it possible to create a company with fewer restrictions than in the United States,” explained Cristóbal Pereira as he highlighted that the benefits for international investment are remarkable in Panama, which places them potentially over other crypto-friendly countries.

Thanks to these advantages, Panamanian companies and organizations are becoming more organized daily, seeking a regulatory framework that provides trust and credibility to digital currency operations that can be conducted from Panama.

For this reason, organizations such as the Chamber of Digital Commerce and Blockchain – which since 2018 groups six companies in the board and has collaborated with several companies, banks, associations, chambers and government entities – have appeared in the Panamanian technological map to connect the government, private sector and civil society to achieve the establishment of a blockchain industry robust enough to make the country a model to follow.

Rodrigo Icaza, executive director of the chamber, says that to achieve this goal, “there is a great effort of training and education, negotiations, analysis and filters of the actors that really add value to the development of the industry.” He also believes that blockchain can positively affect Panama’s GDP.

Although Panama maintains a partial veto of the so-called crypto law by the National Executive, efforts to obtain a regulation do not stop. The various groups that support the use of this technology believe that the next step is to become a hub for cryptocurrencies in the region by strengthening the internal ecosystem.

“You don’t need a law to achieve goals, either,” says Icaza. “As long as they stay within ethics and the right actions of people. But if a law embraces and protects development and innovation, welcome.”

Education is the cornerstone

While it is true that being a financial and logistical center makes Panama a strong candidate to be a pole of attraction for fintechs, crypto-asset exchanges and other related companies, another country has accumulated significant experience in the use of digital currencies: El El Salvador.

The experience of the smallest country in Central America, which adopted the Bitcoin law in June 2021, may not yet be fully dimensioned, as Monica Taher, Director of Technological and International Economic Affairs at the Secretariat of Trade and Investments of the Presidency of El Salvador, explained during her intervention in this incident. However, what is very clear is that one of the critical factors for this country to adopt Bitcoin on a daily basis and at all times is “education”.

“The education process is gradual at the moment and should not fall solely on the government. It must fall on the triple helix: government, academia and the private sector, Taher said. The expert invited these sectors to be part of this meaningful change in all countries that want to adopt the use of cryptocurrencies. “Education must be the pillar so that any nation can adopt bitcoin or other alternatives massively,” she insisted.

On the other hand, she emphasized the importance of private enterprise in El Salvador’s experience. For Taher, the ecosystem can only emerge with the support of this sector, as it will allow to provide more options to different projects and “make El Salvador a crypto hub for Latin America.”

Taher assured that El Salvador’s goal is to adhere to a planning that will allow them to continue to strengthen a legal framework that helps achieve financial inclusion and a decentralized financial ecosystem.

Although El Salvador is the first country in the world to accept bitcoin as legal tender and has more than 200 virtual currency ATMs installed across its territory, 82% of the population still shows little or no trust in bitcoin. For this reason, Salvadoran authorities continue to promote education to encourage the more than 6.5 million Salvadorans in the territory (especially the 70% of the unbanked population) to use this currency in their everyday lives.

More opportunities

Experts and specialists attending the Blockchain Summit Latam made it clear that the use of blockchain technology is not limited to cryptocurrencies. The opportunities for the region also include the digitization of banking, logistics, property tokenization, identity protection, smart contracts, the use of wallets (digital wallets), which are increasingly easier to find in the different countries of the continent and, of course, the purchase of NFTs, among many others possibilities.

They also concluded that more and more Latin American companies and users are leveraging this technology in everyday life as a natural way to achieve financial inclusion and protect the economy. Therefore, they believe that the region must continue to work on education and build a real ecosystem that integrates regulators, companies, financial institutions, chambers and all sectors that can pave this important path in the region.