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Senator Kempis Hints at Proposal to Make Bitcoin Legal Tender in Mexico

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Mexico is preparing to become the second country to accept Bitcoin as legal tender. Senator Indira Kempis of Mexico has announced that a law to make Bitcoin legal tender in her nation would be introduced in the next two months.

Kempis made a comment while speaking at the Bitcoin 2022 Conference in Miami.

Kempis, who was introduced by Samson Mow, former chief strategy officer of Blockstream, argued that if Bitcoin were to become legal tender, it would give financial inclusion and financial education to the more than 67 million Mexicans who are now excluded.

The senator also informed Mexico’s president, Andrés Manuel López Obrador, that senators supporting the bill wanted to meet with him to discuss the idea. She stated, “

“In two months, we will propose legislation to modify regulations in fintech and monetary law… We’re looking forward to sitting down with you [President Obrador] to talk about the plan. Bitcoin as legal tender in Mexico.”

Mexico to follow El Salvador’s league

Kempis, for example, initially unveiled plans in February to propose legislation to make Bitcoin legal money in Mexico.

Kempis said after a trip to El Salvador that a more robust financial instrument like Bitcoin might considerably enhance the Mexican people’s level of living.

Mow, who left Blockstream earlier this month to focus on advising nation-states, also presented other significant actors from nations interested in Bitcoin adoption.

President of Portugal’s Madeira area, Miguel Filipe Machado de Albuquerque, stated in his introduction that he believes Bitcoin is the future and that he is leading Madeira toward becoming more crypto-friendly.

Similarly, Joel Bomgar, the head of Próspera, a Honduran think tank for economic growth, stated that the country was developing crypto-friendly tax legislation.

Nayib Bukele missed the conference

President Nayib Bukele of El Salvador, who made Bitcoin legal money last year, has canceled his trip to the Blockchain conference in Miami.

“I have just chosen to withdraw from the conference owing to unanticipated situations in my home nation that necessitate my complete focus as president,” Bukele explained.

At the Bitcoin 2022 conference, Bukele was scheduled to speak. On March 27, however, his government declared a state of emergency in response to a spike in gang-related killings.

Mexico’s cartels used Bitcoin as a shield to launder $25B: Report

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UN findings revealed that Mexico-based drug mafias are said to have washed roughly $25 billion per year via Bitcoin, the internet, and e-commerce. In the report released recently by the International Narcotics Control Board, the cartels namely Jalisco and Sinaloa have increased their buying spree by utilizing small online bitcoin purchases to evade regulations.

The report further stated that these cartels use drug proceeds to purchase small quantities of bitcoin in succession online while hiding the source in order to enable them to pay associates worldwide.

The US Drug Enforcement Administration representative Raul Martin del Campo stated:

“The INCB is issuing a red alert for countries to come to an agreement and consider how to better regulate this [cryptocurrency] payment system.”

The recent developments come close to the heels after United States President Joe Biden signed an executive order requiring the government to study the dangers and benefits of creating a central bank digital dollar, as well as other cryptocurrency-related concerns.

Mexico safe haven for criminals

In Mexico, it has been reported that several of the country’s most prominent drug cartels are increasingly using bitcoin to finance their criminal activities. The Sinaloa Cartel and the Jalisco New Generation Cartel are two of these notorious organizations.

According to Insight Crime, the Sinaloa Cartel is often called the Western Hemisphere’s largest and most powerful drug trafficking organization. Its Members work together and form an alliance to defend themselves, leveraging contacts at the highest levels and manipulating elements of the federal police and military to keep an edge over rivals.

In April 2019, Mexican authorities detained accused human trafficker Ignacio Santoyo in a posh section of the Caribbean resort of Playa del Carmen after establishing a link between him and a prostitution ring operating throughout Latin America. Authorities also suspect that the accused kingpin is using bitcoin to help launder the proceeds of his crimes.

The Latin American nation is currently lined up to legalize Bitcoin after El Salvador. Last month, Indira Kempis, Senator for the State of Nuevo León, Mexico, expressed her intention to adopt BTC as legal tender.

Mexican senator voices the need to make bitcoin a legal tender

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Indira Kempis, a Mexican senator, hailing from Nuevo León, spoke with Diario El Salvador recently about Bitcoin’s impact on El Salvador and the unavoidable benefits Bitcoin would bring to Mexicans.

During the conversation, Diario questioned Kempis about how her recent trip to El Salvador had influenced her perception of Bitcoin’s ability to alter a nation within the context of the Bitcoin ecosystem.

“El Salvador is unquestionably becoming the world’s most crucial center or laboratory for the future of bitcoin.” Kempis presented his opinion.

“It is apparent to me that financial exclusion is one of the public concerns that few of us have addressed with viable alternatives, and that this sort of technology is allowing us to develop an alternative, a method, a solution to include millions of people in the financial system.”

When Diario inquired about Kempis’ ambition to legalize bitcoin as legal money in Mexico, she continued their conversation by sharing her approach to legislation. They specifically inquired if El Salvador had influenced their decision.

She went on to explain why legislation is needed, as well as the cost of inaction. She added that it would be pretty difficult to develop an effective plan if they do not decide to accept bitcoin as a legal tender. The key to constructing a new financial structure, a fully established bitcoin ecosystem, is to maintain bitcoin’s core legal tender status, on which the ecosystem may be constructed.

Kempis plans to introduce the legislation during the current legislative session.

Mexican senator’s words will inspire other countries

Some lawmakers in the United States, like Kempis, have pushed for Bitcoin acceptance in their states. Last week, Colorado Governor Jared Polis said that the state would begin taking cryptocurrency for tax payments this summer.

In a similar vein, California State Senator Sydney Kamlager advocated embracing cryptocurrencies as a form of payment for government services. The crypto adoption craze appears to be spreading far and wide, with official institutions now adopting it.

It’s hard to ignore the fact that nations will have no other option other than accepting bitcoin five years down the line. If they refuse, they should be prepared to fall into the pit.

Latin America’s bitcoin profile on the rise thanks to Mexico and El Salvador

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Bitcoin has been making its way further into the mainstream this year as the price of the flagship cryptocurrency has soared. While the price is off its peak of more than USD 63,000, the bitcoin bulls are still optimistic about the trajectory of the market for the near future. A couple of key catalysts for the bullish outlook are stemming from the Latin American region. In Mexico, one cryptocurrency startup just achieved unicorn status, while El Salvador is looking to make bitcoin legal tender.

In Mexico, a bitcoin trading platform called Bitso has recently attracted USD 250 million to its coffers in a funding round that catapults the startup’s valuation above USD 1 billion, giving it the coveted and rare unicorn status in the country.

Given the emerging nature of the cryptocurrency and blockchain space, being crowned a unicorn is a major achievement and a testament to the willingness of venture capitalists to direct funds in the direction of the bitcoin market. El Salvador, meanwhile, has become the talk of the town after announcing that it wants to make bitcoin a legal payment method.

El Salvador’s Bitcoin Push

El Salvador has been a bright spot in the cryptocurrency market even as the bitcoin price has fallen from its highest level of the year. During a bitcoin conference in Miami, Fla. in early June, El Salvador President Nayib Bukele became the main event when he announced via a video that the country is looking to make bitcoin legal tender.

The government has teamed up with Chicago-based blockchain startup Strike to prepare the payment infrastructure for the shift to digital currencies. President Nayib touted the adoption of bitcoin as legal tender as key to streamlining the process for the Salvadoran diaspora living abroad to send remittances to households in their home country.

Remittance payments are a major part of the country’s economy and represent almost one-quarter of its GDP, affecting some 360,000 families. Migrants sent USD 5.92 billion in remittances to El Salvador during the pandemic year. The flow of money transfers to Salvadoran families slowed down at the height of the pandemic, mainly April 2020 when remittances plummeted 40%, before picking up again mid-year.

El Salvador’s bitcoin push is facing some potential regulatory hurdles from the very organization that it looked to for help during the height of the pandemic. The International Monetary Fund (IMF) is not sold on the Latin American nation’s plans to make bitcoin a legal payment method, saying that it is worried about the legal and economic ramifications. IMF officials will continue to engage with Salvadoran officials about the bitcoin initiative.

Meanwhile, the bitcoin proposal could throw a wrench into a separate agreement between El Salvador and the IMF in which the regulatory body was poised to provide a USD 1 billion loan program to the country. The IMF also provided emergency funding to the nation during the pandemic year separate from the loan that it has most recently requested.

While there are still regulatory hurdles that El Salvador will have to jump through in order to make this change, the sentiment is viewed as being extremely bullish for the bitcoin price. Not only that, but market watchers suggest that Central America’s smallest country has the potential to influence other nations for bitcoin adoption.

Sustainable Bitcoin Mining

El Salvador not only is looking to strengthen bitcoin’s use case as a payment method, but it also wants to help solve one of the issues that the cryptocurrency industry is facing. El Salvador, which is known as the land of volcanoes, has offered to use its resources to help make the process of mining more bitcoins more environmentally friendly.

Bitcoin mining or the way by which transactions are completed on the blockchain and new bitcoins are created is an energy-intensive process. After Tesla CEO Elon Musk recently called bitcoin mining out for its carbon footprint, as it typically relies on dirty fossil fuels such as coal to get the job done, El Salvador is swinging back. El Salvador has stepped in and is exploring the possibility of selling volcano-fueled power to miners as an energy-efficient way to mine bitcoins.

According to social media accounts, El Salvador’s decision to make bitcoin a legal payment option started with local communities who for the past couple of years have been working to get local storefronts to accept bitcoin payments on an individual basis. This effort has since blossomed, and industry leaders like Anthony Pompliano, who is behind Pomp Investments, are expecting that other countries will follow in the footsteps of El Salvador. 

Mexico’s Bitcoin Strides

Mexico, where cash is the primary payment method, is also experiencing greater bitcoin adoption. To that end, Bitso, a Mexico City-based cryptocurrency trading platform, has become one of the country’s latest unicorn startups after reaching a valuation of more than USD 1 billion. 

Bitso raised USD 250 million in a Series C funding round with a valuation of USD 2.2 billion attached, thrusting the startup into unicorn status. Bitso attracted several notable venture capital firms to the round, including Panter Capital, Tiger Global, Paradigm, Coatue, Valor Capital Group, and QED. As of year-end 2020, Bitso had more than 1 million users mostly across Mexico and Argentina.

While Bitso is considered the most popular cryptocurrency trading platform in the region, it has not been able to escape scandals that can accompany this loosely regulated market altogether.  Bitso was reportedly the trading platform of choice for some bad actors participating in money laundering among drug cartels looking to stash their funds. But Mexico is looking to strengthen its rules to make it more difficult for criminals to use bitcoin.

Mexico is looking to create a regulatory framework by which cryptocurrency and blockchain startups can operate, which has the potential to give venture capitalists even more confidence to back these startups. Mexican Congressman-elect Eduardo Murat Hinojosa has said that he plans to introduce a legal framework for cryptocurrencies to the lower house of Congress.

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Latin America’s bitcoin profile on the rise thanks to Mexico and El Salvador 2

Latin America and Bitcoin

As the Latin American region (including the Dominican Republic, Haiti, and others) begins to make bitcoin adoption more pervasive, the populations of these countries are gaining exposure to a new way to create and store wealth. Cryptocurrencies like bitcoin remain a volatile asset class where the price can swing dramatically in a short period. Compared to the hyperinflation and slow economic growth that countries in the region are experiencing, however, bitcoin offers them hope for technological innovation, more job opportunities, and greater financial inclusion that has been missing.

Bitcoin bull and Mexican billionaire says “Fiat is Fraud”, calls it “stinky”

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Bitcoin has garnered significant support from people all over the world. Mexico’s third-richest man Ricardo Salinas Pliego, who also happens to be the 166th richest person in the world, is the latest personality to have come forward to appreciate the cryptocurrency.

The founder and chairman of Grupo Salinas, made waves after he said that “fiat is fraud” and calling it “stinky”. In a recent interview, that was shared on Twitter by well-known investor and BTC proponent Anthony Pompliano, the billionaire was heard saying that the finite supply of Bitcoin, the 21 billion supply, is the key part.

“I have invested a lot of time studying [Bitcoin] and I think it’s an asset that should be part of every investor’s portfolio. It’s an asset that has enormous value, international value, that is traded with enormous liquidity at a global level and that is enough reason for it to be a part of every portfolio, period.”

Bitcoin Bull: “Fiat is stinky”

The Bitcoin bull was, however, not very confident about the second-largest cryptocurrency, Ethereum, and cast doubt on its potential due to the lack of a limit on the amount of ETH issued. He speculated that “they [could] emit more and the asset depreciates. Salinas also factored in the hyper-inflation over the last three decades that has ripped apart several country’s economies and added,

“Fiat is fraud. Look I started my career in 1981. The Mexican Pesos was 20:1 [USD]. Today, we are at 20,000:1. Don’t tell me. And that is in Mexico, but if we look at Venezuela, Argentina or Zimbabwe, the numbers lose all proportions.”

He went on to say that the US Dollar as hard money is a joke and that he wants to hold Bitcoin over the next 30 years.

Additionally, Salinas also said on Sunday that his banking business may start using Bitcoin. If this does come true, then it would become the country’s first bank to commence accepting the cryptocurrency.

Mexico jumps onto the crypto bandwagon as lawmakers weigh in on Bitcoin legislations

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Mexico had always maintained a low profile with respect to the adoption of cryptocurrencies. The country steered away from crypto after the government found out that these assets were being increasingly used by cartels to launder money. Now, however, certain officials of the region seemed to be yearning for the adoption of crypto.

The five-fold increase of Bitcoin [BTC] paved the way to increased adoption of the coin along with other cryptocurrencies. The world wanted to invest in crypto. While several countries were imposing stringent regulations around the market, many others decided to embrace Bitcoin by laying out crypto-friendly laws. This year, particularly witnessed the arrival of several countries into the crypto-verse. Mexico joined this list as the country’s senator, Eduardo Murat Hinojosa laid down hints about the same in a recent tweet.

Mexico’s senator takes crypto forward

The senator of the federal government of Mexico, Eduardo Murat Hinojosa was smitten by the crypto bug as he included laser eyes in his Twitter profile picture. Laser eyes rose to popularity as a way to show one’s support for crypto. This wasn’t all, the senator posted a tweet suggesting that he would be taking crypto to Mexico’s lower house. The tweet read,

Furthermore, the senator went on to provide reassurance about this as he replied to a tweet suggesting that people could count on him in bringing crypto to the country. He wrote,

“[..] we are going to lead the crypto and fintech in Mexico hand in hand with you. You can count on me for what comes with the intention of putting our country at the forefront.”

Hinojosa garnered the backing of several and another senator, Indira Kempis Martinez,  who represents the state of Nuevo León also exhibited support by adding laser eyes to her profile picture.

Latin America seemed to be going all-in on crypto as El Salvador has been making several changes to accommodate crypto and Mexico was seen heading in that direction.

Mexico’s Billionaire Declares His Investment in Bitcoin

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Everyone wants to know where billionaires park their money. For many, Bitcoin has now become a favorite asset.

Adding to this trend, Ricardo Salinas Pliego, the Head of Grupo Salinas and Latin America’s seventh-richest man claimed that he has 10% of his “liquid portfolio” invested in Bitcoin. Notably, he also happens to be Mexico’s second richest man and is the latest billionaire to declare his admiration for the cryptocurrency that was currently inching closer to its all-time high at a pace never seen before.

While revealing about his investment, the billionaire also recommended prospective investors to read “The Bitcoin Standard,” the award-winning book by Bitcoin educator, Saifedean Ammous.

Pliego also went on to share a video which depicted banks in a Latin American country throwing out garbage bags filled with paper money and stated that “paper money is worth nothing asserting that diversifying investment portfolio is a good option.

Bitcoin Billionaires Club

In recent months, billionaires have been increasingly accumulating the world’s largest cryptocurrency. Not long ago, the hedge fund manager Stanley Druckenmiller became the latest billionaire to publicly disclose his Bitcoin investment. The American billionaire had previously stated,

“Bitcoin could be an asset class that has a lot of attraction as a store of value to both millennials and the new West Coast money and, as you know, they got a lot of it. It’s been around for 13 years and with each passing day it picks up more of its stabilization as a brand.”

Putting all the eggs in one basket could be dangerous and expose the investor/trader to a high level of risk. One of the main reasons why Bitcoin has become compelling to high-net-worth investors is the fact that the cryptocurrency is being viewed as a potential portfolio diversifier, inflation hedge, gold alternative, and large risk-reward potential by several industry experts.

Bitcoin has affected the global monetary system tremendously. In a recent study, it was found that Bitcoin does act as a strong hedge for investors in most of the developing markets. However, it is only an effective diversifier for investors in developed markets, regional indices, and commodities.

It was also found the cryptocurrency is a strong safe haven for only a few national equity indices, regional indices, and commodities. On considering the three extremely uncertain periods, the researchers concluded that Bitcoin is either a strong or a weak safe haven for most of the countries and further suggested that Bitcoin is highly suitable as a safe haven asset in certain periods of high uncertainty.

Cyber Crimes On The Rise As Mexicans Express Concerns

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In recent months, Mexicans have expressed their lack of trust in public cloud network security as cyber crimes and cryptojacking incidents spike. According to El Economista, approximately two-thirds of Mexican firms that use cloud networks such as Amazon, Microsoft , and Google report security issues that cause negative portrayals among Mexicans.

Notably, due to their security vulnerabilities and incidents such as the recent DoppelPaymer hackers assault on Pemex oil company, only a few people trust cloud networks, which in effect leads to public disapproval of the network.

Crypto-related crimes are increasing steadily

There has been a rise in cyber-attacks in different nations, according to recent reports. Mexican companies have confirmed cases of unidentified cyber criminals having penetrated their means of cloud storage to crypto mine, or rather cryptojack.
Latin America ‘s general sales manager cyber security firm Netskope, Alan Karioty, told local media El Economista that the ongoing attacks on Ransomware resulted from ignorance of companies on matters on the security of cloud computing systems.
Consequently, the manager of engineering at Sophos in Latin America, Leonardo Granda, also voiced his opinion on the security vulnerabilities facing cloud networks. He said data loss was a direct result of the poorly set up public access system in the shared cloud storage. He also said it leaves data sources vulnerable to cyber criminals attacking because fraudsters can easily search for them using updated search engines such as Shodan, which they can use to draw them away.

Latin America is fast becoming a soft target for cyber crimes

The continent has reported numerous cases of cyber attacks late and has thus become a soft target for cybercriminals. Nations like Colombia were predominantly one great example. According to a study done by Colombia’s National Police, the rise of cybercrime attacks has been reported. The report also adds that even 30 percent of the attacks on Latin America have targeted Colombia specifically. However, the main priority for cybercriminals was public entities.