How 3 Central Banks & the Financial Elite Embraced Bitcoin for One Day

July 31 saw participants such as the World Bank and other financial elite from Goldman Sachs and JP Morgan gather in Argentina and Brazil to witness the potential of Bitcoin and blockchain technology, particularly for the Latin American region.

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How 3 Central Banks & the Financial Elite Embraced Bitcoin for One Day

July 31 saw participants such as the World Bank and other financial elite from Goldman Sachs and JP Morgan gather in Argentina and Brazil to witness the potential of Bitcoin and blockchain technology, particularly for the Latin American region.

Much enthusiasm

The place, Argentina and Brazil; the day, July 31; the spectators: representatives from JP Morgan, Goldman Sachs, Santander, Itáu, Cielo (Brazil’s largest credit card processor), the International Finance Corporation, the World Bank, Deloitte and the Central Banks of Argentina, Brazil and Chile, among many others. Indeed, the Bitcoin event gathered about 250 people from the banking industry led by the very reputable Pinheiro Neto, a superstar Brazilian law firm who advises all these financial giants in addition to Brazil’s Government and Central Bank.

This is the first time the Latin American banking establishment has attended a bitcoin conference and with such enthusiasm, as sources from Pinheiro Neto confirm the feedback has been overwhelmingly positive. Participants such as the World Bank are now very interested in contributing to the development of Latin America and the rest of the world through its member IFC (International Finance Corporation); a group which invests and collaborates with the private sectors of emerging economies to foster development.

In Argentina, the event was hosted by the Government of the Autonomous City of Buenos Aires in its Parque Patricios auditorium as the local policy makers are interested in digital currency.

Not only banking firms were spectators, as the event was streamed to 11 bitcoin communities, from Argentina, Chile, Brazil, Colombia, México, Uruguay, Costa Rica, Ecuador, Venezuela, Paraguay and even… Slovakia. In addition, English was used to overcome language barriers.

Among the several speakers that contributed to this conference of special interest are Constance Choi (Kraken’s co-founder) who spoke about how to regulate blockchain technologies while maximizing innovation and prosperity; and Juan Llanos (former BitReserve) who indulged in explanations about the current regulatory landscape for virtual currencies.

To get further information, CT spoke with Bitcoin Latam Founder Diego Gutierrez Zaldivar and Gabriel Kurman, CFO of Investment Fund Koibanx; both speakers—and co-organizers—of the event with Pinheiro Neto.

“This opens a door for dialogue that previously didn’t exist.”

- Latam Founder Diego Gutierrez Zaldivar

Diego Gutierrez Zaldivar and Gabriel Kurman

- Diego Gutierrez Zaldivar and Gabriel Kurman

CT: Pinheiro Neto. That name’s not familiar. What can you tell us about them?

Diego: It is the biggest law firm in Brazil, it is not known outside of Brazil, but it’s like saying Marval, O’Farrell & Mairal in Argentina, the studio has 700 lawyers…

Gabriel: ...and it has a revenue of a billion Brazilian Reals, and its own conference room that is the one where the conference was held. All the biggest banks in Brazil, every financial entity, the government, the central bank, each and every one of them are clients of Pinheiro Neto.

Diego: Yes, that’s why for us this is a milestone in the relationship of Latin American Bitcoin communities and the financial and regulation sector. This opens a door for dialogue that previously didn’t exist. That a company with the reputation of Pinheiro Neto helps organize this, validates the importance of Bitcoin even more for the traditional sector. Until now conferences were very much for enthusiasts of technology and finances, we have never had the chance to build something of this institutional level.

CT: What can you tell us about the speakers and the talks?

Gabriel: First we covered all the technical and historical aspects of Bitcoin and the history of money. Then we opened with speakers such as Juan Llanos and Constance Choi, the founder of data authority, and then Diego Gutierrez Zaldívar who is the president of the Bitcoin Latam and Bitcoin Argentina ONGs.

Diego: Yes, they are very much niche speakers, Constance and Juan are considered two of the, I would say, five speakers that know the most about the regulation of cryptocurrencies in the world.

“With these talks we’re avoiding that the same that happened to New York happens to us.”

Conference

CT: Let’s be honest, how are we going to regulate bitcoin? How is that possible?

Gabriel: We’re not trying to regulate bitcoin.

Diego: With these talks we’re avoiding that the same that happened to New York happens to us, that is, that someone comes in to specifically regulate bitcoin and make really bad mistakes, NY has fallen behind regarding bitcoin adoption [..] the application of the bitlicense generates a barrier of entry too high for anyone trying to innovate while doing something new. If Bitcoin is to fit in the current system, it must be done by regulating its uses; not the technology itself.

CT: Let’s say the government learns that some people are using Bitcoin to dolarize their savings. They might not like it very much.

Gabriel: [...] Bitcoin as a currency is just the tip of the iceberg, the key here is the blockchain technology. Fifty percent of the planet’s population is not banked, and they will have smartphones; that way we can bring banking services to the poor in Latin America, the poor in the world, those people. With regulators, we want to make emphasis that we believe that there is no need for new regulation, that according to its use, we will decide under which already existing criteria we want to frame it. Bitcoin is so much more than a currency, if one only looks into the purchase of dollars with bItcoin that’s only the tip of the iceberg, that’s what makes us have the dollar as a unique reserve of value in the world, and that’s what limits us to bank the poor of Latin America.

CT: What do you think is the key point of the conference? For them to see the possibilities of this tech?

Diego: Exactly. Our two fundamental points, when I opened the conference with them as objectives, were that they understood that the technology has an enormous disruption potential in finance, beyond its use as currency; and that it might have a really large social impact in the region because we can give those people that have no access to bank accounts a chance at micro-financing, give them a way to save money; because now they can’t, they store their money under their mattress and they go to work fearing that it will be taken from them. Those two were the strongest concepts that we were working on since the beginning of the conference until the end.

“The World Bank was really interested about how to use it to contribute to the development of Latin America and the rest of the world.”

CT: Now that a couple of days have passed have you got an idea about the feedback from those firms?

Gabriel: The people from Pinheiro Neto were really happy about that. The Brazilian Central bank’s feedback was really positive, in addition to the people invited they had a dedicated room where the conference was being streaming. The World Bank was really interested about how to use it to contribute to the development of Latin America and the rest of the world.

CT: Did you speak in English? Portuguese might be a little complicated…

Diego: Because we were going to stream it to Latin America but we knew that people from different parts of the world watch it we made it in English to unify. But still there were parts in Portuguese…

Gabriel: No, the parts in Portuguese were a panel of local Bitcoin companies and the regulatory framework where Pinheiro Neto talked about the current application of laws in Brazil. That was in Portuguese because it was very local. For example, in Argentina, there were also local talks because local Argentine bitcoin companies and first rate lawyers had their own talks. Right there we cut the streaming, because, well that was a very local component. Also, CNN covered it.

CT: Pinheiro Neto sounds like they deserve the Bitcoin-promoter of the year award.

Gabriel: Absolutely. They are true believers in the potential of this technology. the partner that led the organization with us, the one responsible of financial services and payments in Pinheiro Neto, saw the potential of this technology and positioned themselves as the expert lawyers in the matter here in Brazil.

Diego: They are the main advisors of the Central Bank of Brazil; they help them fine-tune the regulation for payment systems.

Gabriel: They, together with us, said:

“Guys this technology has the potential of including all the poor people in the favelas of Brazil into the banking system. When we regulate this with the Central Bank, we should not restrict it but promote it. Let’s not kill the goose that lays the golden eggs.”

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