The guide to self-regulate the operations following the highest industry standards.

Recent events in the crypto industry and the entry of new customers into this ecosystem have accelerated the interest of governments in regulating crypto service providers.

Since the founding in 2014, Bitso has supported authorities in their quest to create regulatory clarity for the industry.

Bitso has done so with the conviction that such clarity is necessary to achieve an honest market, and that responsibility, transparency and risk management are necessary to provide protection and security to the clients.

Bitso is currently the leading provider of cryptocurrency-powered financial services in Latin America.

Bitso operates in Argentina, Brazil, Colombia, and Mexico, offering the clients a simple and reliable way to access secure, easy-to-use, and borderless financial services powered by cryptocurrency.

Bitso believes the Latin American financial system is ripe for disruption, especially considering the financial exclusion, costly cross-border payments, and rapidly devaluing fiat currencies the region faces.

At Bitso, they are using crypto to generate changes in these systems.

For example, in the first three quarters of 2022 Bitso used crypto to transact more than $2.1 million in cross-border payments in a fast and low-cost way, and this is a number Bitso is looking for in 2023.

Despite the different daily use cases that Bitso sees in crypto, the potential of this technology lies in its ability to become the trusted alternative to traditional banks, so regulation plays a key role in creating the necessary trust for boost its adoption. That is why, through the years, Bitso has consistently sought to comply with existing regulations, and even self-regulate when a legal framework is lacking.

The experience as one of the few end-to-end regulated platforms in the region has helped Bitso identify best practices that fit the financial reality of Latin America. This guide brings together the practices and principles to which Bitso has adhered and committed as a crypto service provider that prioritizes security, responsibility and risk management. These are the principles that govern the operations and the standards Bitso takes into account when Bitso meets with regulators to build legal frameworks that usher in the future of finance.

Go to Bitso’s Official Website

Regulatory principles for crypto in Bitso

1. Defend the interests of the clients above all

As Bitso strives to create products to make crypto useful, Bitso is committed to operating in a safe, secure, and transparent manner. Consumer protection has always been at the core of the business, and in the past Bitso has sacrificed rapid growth to ensure the safety of the customers. This gamble has paid off.

Bitso supports regulations that not only defend consumer protection, but also their rights.

2. Safe custody of funds

Bitso supports and promote public policies that ensure best custodial practices whenever clients entrust their savings or assets to a third party. Bitso sees segregation of funds, multi-signature wallets, and constant audits by independent third parties as keys to protecting funds from potential risks that may arise in the industry. Bitso takes all necessary precautions to safeguard clients’ assets from unexpected eventualities, and Bitso will never use the clients’ funds without their explicit permission.

3. A truly inclusive financial system

International financial regulation has been built from and for those with privileges and, as part of the crypto nature, at Bitso they want and seek that it be built from everyone and for everyone. In Latin America there are entire populations that, given their lack of credit history or proper identity documentation, have been marginalized from financial service, unable to access equitable financial products and services. Bitso advocates for regulations, policies and practices that prioritize the interests of those who have been displaced by the traditional financial system.

4. Technological neutrality

Technologies are not inherently good or bad. Users have the right to use whatever technology meets their needs, including blockchain. Bitso supports regulation that magnifies the objectives to be achieved over creating value judgments about the technology used to achieve them.

5. Anti-money laundering (AML) rules that effectively prevent crimes

Bitso maintains a strong commitment to comply with the AML standards against the financing of terrorism (CFT) developed by the Financial Action Task Force (FATF). However, Bitso believes that AML policies that require disproportionate customer due diligence procedures are restrictive, and discourage those financial service providers that offer their products to low-income individuals. Therefore, Bitso supports the logical application of AML/CFT policies that identify risk areas based on countries, customers, and products, and that do not compromise the ability of financial technology institutions to provide financial services to a wide range of people. Given the transparency and traceability of blockchains, crypto is especially well-suited for providing information that facilitates appropriate risk-taking with respect to illicit activities. The vision of a risk-based application of AML/CFT standards is based on the fact that, in 2022, only 0.24% of all cryptocurrency activities were associated with any illicit activity.

6. Education as the key to informed risk taking

For a long time, access to more sophisticated financial instruments in emerging markets has been a privilege enjoyed by few. The lack of financial education and the use of technological jargon have contributed to a culture where people prefer to avoid the use of instruments that can help them create generational wealth. Bitso advocates for quality financial education and support policies that reinforce the importance of clear communication and appropriate risk disclosures. Bitso believes that such education, communication and disclosures empower clients and the general public to make sound financial decisions.

7. Borderless access to financial services

Sending a message from different corners of the world today takes fractions of a second, and the marginal cost of doing so is close to zero. However, transferring money between two countries carries an average cost of more than 6% of the total value of the transaction.. In the experience, crypto-backed products can significantly reduce the costs and increase the efficiency of cross-border payments when compared to traditional means of international transfers. Therefore, Bitso advocates for policies that protect and incentivize a borderless financial system powered by crypto, and that recognize that imposing sovereign frameworks on borderless assets is pointless. For this reason, although Bitso knows that each country has a unique financial reality and its corresponding regulatory frameworks, Bitso supports policies that inhibit regulatory arbitrage and that are homogeneous enough to enhance the global benefits of crypto.

8. Corporate governance agreements that promote ethical practices in companies

Few responsibilities are as important as guarding the money of others. That is why Bitso values and advocate for the implementation of internal controls and processes that defend the integrity of operations and hold the directors accountable for pursuing the best interests of the clients. Bitso supports policies where there are processes to guarantee proper decision-making on fundamental issues and to ensure that all the interests of the investors are being duly protected.

Go to Bitso’s Official Website