Latam Insights: Cryptocurrency Developments in Latin America
This week, Latam Insights brings you a roundup of significant developments in the cryptocurrency landscape across Latin America. Leading the charge is Meliuz, a Brazilian cashback company that has boldly embraced Bitcoin as a reserve asset, becoming the first publicly traded firm in both Brazil and the larger Latin American region to adopt this strategy.
Meliuz’s Bold Move
Meliuz recently executed a substantial purchase of 274.52 BTC for approximately $28.4 million at an average price of $103,604 per Bitcoin, achieving an impressive yield of 600%. Company CEO Israel Salmen expressed excitement over this commitment, noting that the move was widely approved by shareholders and marks a pivotal shift in the company’s financial strategy. With this latest acquisition, Meliuz now holds a total of 320.2 BTC, with an average cost basis of $101,703.80.
Challenges for Cryptocurrency in Argentina
In contrast, the situation for cryptocurrency service providers in Argentina is worsening. A tax law established back in 2001 imposes a 1.2% levy on all cryptocurrency transactions, significantly burdening local exchanges and wallet providers when compared to their international counterparts and traditional financial institutions.
Despite securing a temporary reduction to 0.075% in 2021 based on a connection to the internet sector, recent evaluations by the Argentine tax authority, ARCA, may revert the tax to its original rate. Should this occur, it would pose a severe threat to the local crypto ecosystem, as the costs would outstrip the transaction fees these entities typically charge. Furthermore, if the government applies the tax retroactively, many local businesses could face insolvency due to the overwhelming financial obligations.
Positive Developments in Colombia
On a more positive note, Ripple has taken significant strides in Colombia by launching its second pilot program this year, in collaboration with Mercy Corps Ventures and traceability specialist WËIA. This initiative aims to enhance agricultural financing for small-scale farmers using blockchain technology, part of Ripple’s “Unlocking Opportunity” program.
Ripple aims to leverage the XRP Ledger to increase access to finance and improve the income of Colombian farmers by utilizing enhanced traceability to streamline agricultural practices.
Stay tuned for more updates on the rapidly evolving crypto sector in Latin America!
