Buenos Aires-based real-time bitcoin and litecoin exchange Bitex.la has officially launched with the goal of providing what its founders call the Latin American market’s “first regional exchange”.
The news follows the company’s soft launch this March, with the formal unveiling representing the company’s introduction to the wider Latin American ecosystem it aims to target. To date, Bitex.la says it has enlisted users in Colombia, Mexico, Spain and the US, though it aims to soon expand to more countries.
Perhaps most importantly, however, the exchange will also service its home market of Argentina, where a volatile local currency and a high black market demand for USD have created a burgeoning bitcoin ecosystem that could prove to become an integral foothold for the industry.
Francisco Buero, the company’s chief operating officer, framed Bitex.la as a company that will seek to become a trusted digital currency trading and banking alternative to the already robust local market.
“We’re going to [be] launching a trading API in the following months, and we’re investigating and trying to set up better ways for people to fund their accounts, so most of the money is going to go to new markets in Latin America,” Buero said.
Bitex.la is backed by a $2m investment from a UK-based investment firm that it says will provide it the capital it needs to follow through on this mission.
Operational challenges
Of course, given that major Latin American markets are just now beginning to react publicly to bitcoin, Bitex.la is taking steps to mitigate the potential risk it faces by being early to market. Argentina’s Central Bank, for instance, this week issued a warning to local investors.
Hence, the exchange, while using Buenos Aires as its base of operations, is incorporating in the Netherlands in order to guard against this risk, said Buero, explaining:
“Latin America doesn’t have a clear picture about how to regulate bitcoin. It’s not as safe or convenient to set up a [bitcoin] business in Latin America. We don’t want to be a victim to the whims of all the regulators in these countries yet.”
Buero continued suggesting that, by incorporating overseas, Bitex.la hopes to negotiate with regulators in each market differently.
Emphasizing user experience
Bitex.la is looking to build services that outperform other available market options, which it has criticized for not working with local currencies and requiring consumers to have a “deep understanding” of bitcoin and its related technology.
Buero noted that Bitex.la is currently seeking to formalize its customer relationship with payment processor AstroPay, which would allow it to streamline how users will interact with its website. It is also looking to work with major remittance providers Western Union and MoneyGram as well.
However, the company still faces banking challenges:
“Right now, the main funding option that people are using is international bank transfer. We are offering OKPay through AstroPay, which in turn goes through Egopay. It’s a very cumbersome process, people are not actually using that since it takes so much time to get the money to us, so they’re just using bank transfer.”
By using AstroPay, Buero suggests, this three-step process will be simplified: “We will offer you a button that says ‘Fund through AstroPay’. Then, you can set the amount and your payment method.”
AstroPay had previously provided a similar service to now-defunct Japan-based bitcoin exchange Mt. Gox that allowed it to take customer deposits from Argentina, Brazil and Mexico, among other major Latin American markets.
Building trust
The company is also taking steps to secure its customer funds in light of the recent problems at major, centralized bitcoin exchanges. The exchange says it will use technological standards such as SSL and AES-256 cryptographic encryption, and that all deposits will be kept in cold storage.
In addition, Buero said that the site now allows users to enrol simply by uploading an ID to the website. The photo is then validated to meet know-your-customer (KYC) compliance standards. Customers can then fund their accounts with up to $3,000 each month.
Buero, however, does acknowledge the challenge of creating awareness about bitcoin and his company’s services.
For the moment, he says Bitex.la is aggressively targeting new customers through Google and Facebook outreach, but that it aims to meet with local players in each of its target markets so it can help these entities liquidate their BTC holdings.
Still, Buero suggests that the company is still treading cautiously, aiming to take the right steps as it seeks to corner a coveted market, saying:
“We are going after those guys one by one and that’s how we’re building most of our exchange’s volume right now.”
This approach could prove wise given what’s at stake in a local market, where the high volatility of local currencies could make bitcoin a viable, everyday payment option, and $50bn in black market USD is held in Argentina alone.
Buenos Aires image via Shutterstock