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Applying blockchain for fintech… wait, not just for fintech?

Argentina stands out in many fields in which intelligence is the main raw material. One of them is software and digital ventures. The “five unicorns” are proof of this: Mercado Libre,, OLX, Globant, and the most recent Auth0, Argentine companies that each exceed the $ 1 billion in stock market valuation. Within the same logic, Argentine companies also set a trend in innovation in Blockchain, that technology that allows the existence of Bitcoin and whose base is to be a reliable, cheap and fast method of certifying data and transfers.

One of the Argentine companies dedicated to this new sector is Koibanx, which implements Blockchain for public and private finances. The firm was born in 2014 and focuses on the creation and customized of secure solutions for the financial industry. Among its products there are “wallets” (payment wallets), loyalty programs, cash-management platform, tokens (for Blockchain digital assets), and donation management, among others.

Leo Elduayen, co-founder of Koibanx, spoke with Ambito and explained the scope of his company and currently a sector that is full of potential. “Argentina has the possibility of making a point in one of the most promising technologies of the future”, he was optimistic about the conditions of the country to work with Blockchain.

Why Blockchain solutions represent a market opportunity fintech?

L.E .: The application of Blockchain technology to financial solutions represents an opportunity for the entire industry, not only for fintechs. That said, nowadays for regulatory issues or commercial oligopoly there are a number of ideas or projects to make them, require the permits or services of financial institutions that centralize access to the financial system. Sometimes, some of these institutions, stop the development of these ideas or projects because they compete with their business model based on the status quo. For these ideas and projects, to have a technology that registers, processes and programs transactions safely, resiliently and does not belong to anyone is then a great opportunity.

Is it a good alternative in Argentina to target for unbanked people?

L.E .: There is a very big cliché in the industry when it comes to banking at the base of the pyramid with Blockchain technology or cryptocurrencies. However, in theory the possibility is achievable. The reality that more and more people have a smartphone, which is all they need, and that Blockchain technology and cryptocurrencies allow transactions at very low costs in relative terms, are factual data. The cliché occurs because although this is true there are a number of things in the middle that we must work to materialize, such as digital and financial education or savings at the base of the pyramid. That’s where there are really very few projects working, but I have no doubt that those who are doing it, as in the case of Didi, a project of the Inter-American Development Bank with the NGO Bitcoin Argentina, Blockchain for Humanity or MonedaPar really lay the foundations for achieve this goal. Technology is a great tool and it would certainly be an ideal alternative for what you ask, but without the corresponding education actions we will take a long time to arrive.

In what state of progress is Blockchain technology currently in the country?

L.E .: Argentina is recognized worldwide for its development in terms of Blockchain, Bitcoin and cryptocurrencies in general. Argentine entrepreneurs and entrepreneurs are behind the most interesting projects in the ecosystem, such as Xapo, Bitex and RSK, among others. In turn, some of the most convening movements such as the laBITconf or BitcoinDay conferences are also led by Argentines. Finally, the NGO Bitcoin Argentina is the first civil association for the development of the “bitcoiner” community that was created in Latam and of the first worldwide. The NGO groups entrepreneurs, ideas, is a source of consultation for regulations and works hard in education, etc. In Argentina there is a lot of talent and unfortunately the socio-economic condition has always pushed us to look for alternatives to get ahead. The adoption of these technologies is a true reflection of this.

Do you think the world of cryptocurrencies and Blockchain have the potential to revolutionize finance worldwide?

L.E .: Without a doubt. Bitcoin emerged in 2009, after the last major economic crisis of the currency that is used as a world standard. Chance or causality? Unfortunately we will never know for sure, but I am inclined to think that it is not chance. Today the whole world bases its economy on the dollar, on the confidence we have in the American government, or even on the confidence that we have in all the macro-economic world players continue to consume, supplying and trusting in the United States. This is fragile, history showed it several times already. Think of the emergence of a technology that allows value transfers with the ease and cost of the Internet, which by definition has a deflationary mathematical economic model, which despite being digital is 100% transparent and in more than 10 years of history has never managed to be hacked or adulterated and that does not depend on any person, country or state, is definitely a symptom that the world of finance is going to revolutionize.

Is there a lack of regulations in the country and the world for the implementation of Blockchain to grow?

L.E .: Regulators often make the mistake of regulating technologies, instead of regulating uses and their principles. The regulator should focus on creating regulations that are not obsolete over time, or at least not as assiduously. Technology inevitably advances at a different speed, what we should foresee is how to regulate uses regardless of the technology they use. The regulatory framework should mainly consider two things. First, carry out the appropriate cost-benefit analysis that seeks to promote public policies. Laws are nothing other than the set of incentives and punishments that we seek to promote in our society. In a context where a technology emerges that allows us to improve situations of exchange and value management in its different forms, making it accessible to a greater number of people, what decision should we make as a regulator? Limit it by not complying with legal forms that were thought before even the Internet was a socially accepted phenomenon? The second point that we need from our regulatory framework is legal certainty. If this technology allows us to solve a lot of the financial problems with which we find ourselves today, but there is no clear and safe knowledge about the consequences of using it (criminal, fiscal and commercial) or if it changes to the pleasure of the regulator of In turn, we can not exploit the benefits that these technologies bring. In general terms, I do not believe that more regulation is needed, with the exception of a very specific issue, but a clear statement that provides certainty about how this technology should be framed and interpreted to existing legislation.

In what other sectors do you augur good possibilities for the Blockchain?

L.E .: Blockchain adds a lot of value in industries and processes where there is an exchange of value. These exchanges can take the form of money, documents, assets, information, etc. Traditionally as a company we have granted roles (and even paid for having them) to third parties to guarantee such exchanges. To act as trust generators (Banks, insurers, the State, notaries, etc). If we as users, or even these trust generators, have a technology that allows them to validate these exchanges in a more transparent, secure, programmable way and with a greater degree of privacy, I see a very fertile application field. This is what Blockchain brings to the table. Blockchain is a technology that positively impacts multiple industries (the field, the state, banks, finance, insurers, digital certification, etc.).

How do you see the panorama of cryptocurrency quotes?

L.E .: I see it little relevant. There is a very curious correlation between the price of cryptocurrencies and the attention that the public gives them. By making a parallel between the historical evolution of the price of Bitcoin (the cryptocurrency with more history and greater market) you can see a perfect direct correlation in the price with the number of times that users search for “Bitcoin” in Google. Bitcoin is a phenomenon that represents values and fundamentals that will undoubtedly make it one of the most valuable assets / technologies / “currencies” on the planet. We are in this a couple of years ago we all agree on them. However, today I would like the public to stop focusing on the price and pay attention to the amount of things that are being built in the region and even in the country, such as Tarjeta Naranja, having already implemented a first development on the technology, the innovation table of the BCRA and the Fintech Task Force of the CNV treating crypto as one of its central axes, the publication of the official bulletin being notarized in Blockchain, the first operation of Comex between Argentina and Paraguay using Bitcoin through Bitex, the fact that there are more than 10 companies recognized worldwide in Argentina, that we are the 5th worldwide community in number and level of people involved. Argentina has the possibility to make a point in one of the most promising technologies of the future. If we manage to materialize all this, the price will be a natural consequence almost without looking for it.

Published inFintech

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