In the Ripple BlockStars Podcast, Joel asked: In the past year, Mexico has seen a boom in the crypto market. And the country is embracing this technology at breakneck speed. Here discussing the Mexican landscape and why this country is right for adoption is Daniel Vogel, CEO and Co-founder of Mexico’s leading crypto exchange, BitSo.
When asked: In May of 2020 Bitso reported a 342% trading volume growth over just eight months less than a year. And over a million users, vast majority of them over 90% were Mexican that is an incredible growth rate. What is going on? Why?
Daniel Vogel replied: I would divide it in to two. The number one when we think of customer adoption in Mexico, what we are seeing is a complex macroeconomic environment, where the Mexican PESO is being very volatile against the USD. A lot of uncertainty from an economic perspective. And, what we are seeing are individuals are having a hard time accessing the currencies like the dollars. Being able to do so with crypto. And, so a very large chunk of that increasing volume, came from stable coin demand. Customers in Mexico, who were having a very hard time having a bank account in USD that are fleeing to crypto exchanges to being able to protect their assets and they see that the dollar is a way to do that.
And, they see that crypto exchanges allowing to convert to and from USD as a really good way for diversifying but to be able to have that liquidity on demand whenever they want to.
When asked if store of value is the key use case? Store of value is the huge use case. And, definitely in the months between March 2020 and May 2020 as the world was trying to understand what coronavirus meant and what was going to be the macroeconomic impacts of it, a lot of people are fleeing to stable coin and there is a huge demand for stable coin
The second reason why volume has been increasing significantly was actually because we have adoption of the ODL or on demand Liquidity. On Demand Liquidity which is the product that Ripple has built and we are a partner of it in Mexico, allows licensed money transmitters to move assets very quickly between USD and Mexican PESOS and utilizes exchanges like Bitso to get that liquidity and so we saw a significant amount of volume on the exchange triggered by a significant amount in ODL Volume. So, obviously remittances are one of the significant fraction of the volume.
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