A pesticide manufacturer from Argentina has exported goods to Paraguay. When making payments, Bitcoin was used, perhaps for the first time ever, as a tunnel currency in cross-border payments. This puts the cryptocurrency in competition with SWIFT and the dollar.
This could be a world first: Bitcoin was used for the first time as a means of payment in an official international transaction. An Argentine pesticide manufacturer has exported $ 7,100 worth of goods to Paraguay. The payment was processed by the Argentine Bitcoin startup Bitex.la.
Bitcoin acted as tunnel currency: the importer from Paraguay paid with the local currency, the guarani, and the exporter from Argentina did Receive Argentine Pesos. Bitex has changed the Guarani into bitcoins and the bitcoins back into pesos. The cryptocurrency took on the role of a clearinghouse – it fixed the transaction. Because this is otherwise done either through the international payment network SWIFT or a dollar transaction, this small, inconspicuous transaction could write history: Two Latin American countries do business with each other without being dependent on an external service.
{{1} } Manuel Beaudroit of Bitex said the aim was to connect the Latin American economies and make them more competitive. Bitex is a payment service provider from Argentina that has been extremely busy over the past year.In May, the startup announced a partnership with Bank Masventas, whose goal is to create an alternative to SWIFT for international payments. And just a week ago, Bitex announced that it had won SUBE, the operator of local public transport. Customers can now top up their SUBE cards, which are used to pay for their tickets, with Bitcoin. There is a huge number of services on the Internet for earning bitcoins, they achieve success here https://cryptoine.com/everything-you-need-to-know-about-biswap-bsw/. The world does not stand still, development is moving forward rapidly.
The export transaction to Paraguy is part of the “Export Simple Program”, an Argentine program for the Promotion of export, in which Bitex participates. The program reduces bureaucracy in foreign trade by making it possible to send shipments up to 300 kilograms without registering as an exporter. Bitex’s service is primarily aimed at smaller payments between 150 and 5,000 dollars and allows Argentine merchants to ship products to South and Central America, from Chile to Mexico, but also to Australia and the USA. Thanks to Bitcoin, Bitex can reduce payment friction because there are fewer intermediaries who each introduce new bureaucratic procedures.
Bitex currently charges a flat fee of one percent for payments. This makes the transactions for small payments, up to 5,000 to 15,000 dollars, profitable, but beyond that, more expensive than the regular channels. At the same time, Marco Moscatelli of Bitex says in a comment that the network is intended for “big players and significant” sums. I do not know exactly how to resolve this contradiction. More important than the costs, however, is the speed, as payment is finalized in an hour instead of three days.
It should not be a coincidence that such a company started in Argentina. The country in the south of South America has long been known for the active Bitcoin scene, which is probably largely due to the strong inflation. Compared to the euro, the peso has fallen from 1:10 to 1:43 over the past five years. This is still far from hyperinflation like in Venezuela, but more than enough to attack the people’s savings and affect foreign trade and its financing.
In contrast, the Paraguayan Guarani is relatively stable. Paraguay is a small, interesting country between Argentina, Bolivia and Brazil. Only 6 million people live here, democracy seems to be stable, the economy is predominantly agricultural. If you know that exactly. Because the country has a large black market or informal sector. There is a flourishing smuggling to neighboring countries, Paraguay is the largest producer of cannabis in South America and exports 95 percent of the harvested cannabis to neighboring countries.
At the end of January the government considered introducing punitive tariffs for imports Argentina and Brazil to impose. Industry Minister Luis Llamosas brought up charges “that would regulate the importation of foreign products because they are currently very cheap”. The reason for this is the devaluation of the currencies of the two countries. He hoped, however, that Brazil and Argentina could get their currency crises under control and that such an instrument would not be necessary.Paraguay’s economy is closely interwoven with Brazil, Argentina and Uruguy, more than 50 percent of imports come from these countries, more than 60 percent of exports go to them.
Paraguya seems like it for bitcoin miners the huge surplus of hydro-energy to become more and more interesting. In November 2018, the South Korean “Blockchain Technology Foundation” announced that it would build the world’s largest mining center in Paraguay along with a crypto exchange. The Foundation has bought five properties of 10,000 square meters each from the government near the country’s second largest city, Ciudad del Este – known as the metropolis of smuggling. The government has given miners a fifteen year guarantee on cheap electricity prices; Vice President Hugo Velázquez said: “The government of Paraguay will actively support the Commons Foundation’s ‘Golden Goose’ project to enable tax breaks.”
