Crypto Entrepreneurship in Emerging Markets: Needs, Opportunities and Global Impact

Transcript

Okay, this is our quick little sound check. Can everyone hear me? Okay, fantastic. Uh, we're very excited to have our first panel of the day of our first day of the Crypto Valley Association conference. This is our seventh time having the CVC. Um, so thank you guys so much for joining us bright and early this morning. Uh I would like to introduce our panel crypto entrepreneurship in emerging markets needs opportunities and global impact. Um moderated by Christina Lustano. Um I would also like to give a special shout out that two of the people on the panel um actually came all the way over from Mexico. So give them an extra little cheers on this one, please. Um and um and we're especially excited that

this panel is featuring uh the CVA's Latin American chapter. So, I will let you guys take it away. Thank you so much. Hello. Hello. Good morning, everyone. I'm glad to be here with all of you and our amazing friends right here. I'm Christina Luno. I'm part of the LATAM share at CVA as Ellie said and also I'm uh the co-leader of ICP of Mexico and a co-founder of Sonatres and Incubator for LATAM. So today I'm very excited to start this uh crypto valley conference 2025 and for this um I'm I would love to introduce my uh fellows my friends over

here. So Clauddio how are you? Good morning. Uh good morning. So hello everybody. My name is Claudia. I'm co-founder of Metapple. We're a multi-chain liquid staking DAO. So we've uh been on mainet since 2021. Uh also I'm a co-chair of the LATAM chapter for Cryptobal Association and uh most recently we helped launch ICP Hub Mexico to not only support developers but also entrepreneurs from the region and so happy to be here all the way from Mexico City. Okay. Hi everyone. Uh I'm Kagondu. I'm the lead of ICP Hub Kenya. So I'm from Africa, East Africa specifically. And what we do at ICP hubs is that we

evangelize educate incubate and launch products on the internet computer protocol. And I'm really honored to be here. Good morning everybody. My name is Fabola um from CVC and CV Labs. CVC is uh well one of the uh oldest um venture capital companies here in Crypto Valley. So he we had been supporting projects um um with funding here um in the in the Swiss ecosystem with global startups. So um as well we have the pleasure to have in our portfolio several companies that are operating in emerging markets. Um and

Civil Labs is an ecosystem builder because we think uh money without the right network and connections is uh is not as effective. So the the mission of civils is to create all the um the bridge the bridges and the activations for um for all the stakeholders to be connected and to to have a ripple effect. Then also a very uh warm welcome from my side. Good morning. Uh very nice to see the motivated individuals attending the first panel here. My name is Tilma. my daytime occupation. I'm the CEO of SU payments which is now transitioning to

gold. We are a Latin Americanbased uh payment institution and we combine local payment acceptance with crossber USDT settlement. Now at the CVA I'm leading the working group education in where we organize everything in and around blockchain education that includes webinars, research journals and all other activities. Uh I'm still with one foot in academia and I just published in the beginning of the year the book short the rib the era of financial blockchain based financial instruments. Please uh if you want meet me outside for a free copy and looking forward for this panel.

Thank you. Thank you. Thank you so much for those amazing introductions. So uh we are about to start. Um our panel is crypto entrepreneurship in emerging markets. So at the end of this panel if uh we have time we can h ask some question to the speakers over here. So yeah. Okay. Uh I want to start with the first question for you guys. So what are some unique challenge you have encountered while while building or supporting crypto projects in emerging markets? Is that clear? Oh, I'm um asked again. It's perfect. Okay. Um

Ivonne can you respond this question please? Um yeah sure thank you Christina. So as ICP Hub Kenya um and all ICP hubs we have about um I think right now we have about 20 ICP hubs. The aim at the end of the day is to launch projects and the challenge we've been having at least in our emerging market that's Kenya and Africa in general is that we are primarily a consumer market that is um in adoption of crypto we among the leading not just Kenya but Africa uh because of the needs of the currency issues that we have the need for remittance etc. So you'll find countries like Nigeria being second in crypto adoption but we're not building

enough. We're not we don't have products coming from the Nigerian market. It's mostly uh Binance, Bitkate, etc. that are leading the adoption there. So as ICP have Kenya, we wanted to change that narrative. We wanted to be producers. We wanted our people to create jobs for our region. We wanted more products coming from from uh Africa, from Kenya. But as we tried, as we went on uh with our trainings, with our incubation, we noticed that we didn't really have the producer culture, we didn't really have uh that drive from our students, from our developers. So we had to sort of pivot a bit and start a dev shop where we can link um other our students our developer students especially to

startups in the ICP hub ecosystem and they can learn and benchmark from other startups from other regions with the hope that in the long run we can be able to get more products from from East Africa. Yeah. Amazing. Thank you. Thank you Ivonne. And it's amazing that work that you have been doing in Kenya. But uh let's uh know about another region like Brazil. Tilar. Yes please. So in emerging market it comes with opportunities and obviously challenges right. Uh when we look at emerging markets and I think there are somehow everywhere similarities especially in the Latin American market.

It is all the issues we we faced in in a very premature market. I sometimes say in my presentation and lectures, you can compare this with maybe Switzerland 2015 2016 when there was not yet a meaningful regulation or regulatory environment for startups to to to start their project or for investors to invest in startups which operate in a stable environment legal in um legal environment. Another thing what al also comes with with those emerging markets is that sometimes regulation change overnight. So what happened in the last two weeks in Brazil is that the foreign exchange tax

increased from 0.38 to 3.5% overnight. The government just changed right. So obviously for us offering services in emerging market or cross border this is a challenge. And then last but not least, I think one of the the the main issue is having the understanding in the market, not only from the consumer using the product, but also from the regulator, from the banks, from the partners you need as a sparing partner. They are not yet so far like we let's say are here in Switzerland. We lived through this phase of explaining the government where the crypto valley where the crypto valley association did

amazing job to support the regulator to implement meaningful regulation but all these pinpoints they do not yet exist uh in let's say Latin American markets Brazil Mexico amazing fabula yes I I want to adhere like I work for civil labs so civil labs is an ecosystem builder the only thing we do is uh to to foster all these interactions among different stakeholders. Um I I've been working in the space since 2018 and I'm fascinated about what we are capable to achieve uh technologically speaking. uh being here in Switzerland, I have seen amazing uh

solutions like things that are really that have a transformative uh potential that you say, "Wow, this is uh this is fantastic and this this can make a difference um in um in emerging markets, right? So, uh we see technology is great um all the possibilities and the potential is fantastic. But why it is so relevant to create ecosystems? Because the main problem in our space is not technology. Our main pro problem is like um to h to to put to align the the vision of different stakeholders that uh have the power to to develop the

projects in in the in the different regions. So regulation is extremely relevant and as well the alignment with among the different um providers. So that's let's say from the offering side of of of the equation. But another important part as well is um the user um the the the user awareness. And it's like okay why should I use this um or what how this is benefiting my life or changing my life in some cases we will talk a little bit later in the next questions it comes almost by necessity not by option but uh what is very relevant is that we need to have um ways

to communicate that they're very straightforward very easy with user interfaces that are seamless. So up to now one of the two main blockers for for the crypto adoption has been one is like the alignment of different stakeholders and the second one is um the how friendly or how easy it is for the end user to grasp and to and to implement and to use. Thank you Faba Cladio. Yeah. Um so it's important to to understand that uh the the driver for adoption is necessity right that's the key thing I know many in the audience might be entrepreneurs

or working for companies interested in LATAM necessity is the main thing if you're building a product if you're building a surf service and offering it you need to understand what's the necessity right Argentina leap frog everybody because they have a necessity if you hold pesos you're you're kind of like the dumb holding the bags right? You know that it's going to be worth less tomorrow. It's a fact, right? And so what they do, they try to get dollars. It's expensive. It is very insecure because you're holding the dollars in your under your rug or whatever, right? And so they get access to what? USDC, USDT. And what's the best way? Well, it's not it's not going to be in Ethereum. They use Tron, right? Or they use Ripple as well. So they're

using not the best tech but the service and product that really solves the need right and so that's one of the key opportunities in LATAM key challenges of course Tilman said it regulatory wise yes it's it's a mess right be prepared to engage regulators that may may it's not in their best interest right to put this technology forward maybe you'll find regulators that they're open to it right you'll find institutions right? Like BBBA, right? They're doing they have BBA Switzerland is servicing right now BBBA Mexico.

That's why it's now you uh you have Mexican citizens and organizations that have access to crypto through the BBBA banking, right? But still a lot of a lot of white space there. The most important thing that you need to understand is regulatory wise it's still unclear. Be be very aware that you like Tilman said might change tomorrow, right? Do you have contacts in the government or with the regulator? That's really important. Yes, you you need to do a lot of the lobbying and whatnot. That's part of the game. And third, yes, there's a lot of need of education. Like uh Fabola said, why would somebody put their life savings or their daily savings in that pro in your product or service? It needs

to be clear that you're solving an issue for them, right? And then access to dollars, that's kind of like the the uh spearhead of everything. But it's now people are thinking okay it's DeFi how do we engage with it can I get yield how do I get access to it right and for me the most important thing that crypto brings and the great opportunity is for is for people and organizations to really own the value that they create digitally so that's the big unlock right stable coins again that's spearheading everything but I think uh DeFi will have it its moment as well in emerging markets especially in LATAM thank you thank you for that thoughtful uh opinions we can see how regions like uh Kenya to Brazil, Mexico, Latin

America and also from inside like civil labs with Fabiola h the challenges are very different but has a one point in common right so thank you very much for this and um I would like to know what are those projects that for you have uh been um a real impact in their regions in your regions. Um I'll I'll I'll start. So um so for me one of the leading projects and and it's the mixture and I like Tilman said, right? The mixture between fintech or traditional finance and crypto, right?

The one the outstanding one that I will say it's like lemon cash that's like a a revolute for for for Argentina. But then you have also this small very small players, right? and in this case is DTO banks. They're a neo bank from El Salvador, right? That they're expanding to Mexico and leveraging the regulatory clarity that they have in El Salvador. It is no strange uh movement that Teter is now headquartered in El Salvador. Stripe also is has headquarters in El Salvador. They're doing that because of course they the acquired bridge, right?

And with their recent announcement in their conference, they the cat's out of the bag, right? So, stables is going to be at the forefront of every fintech in LATAM. And um and here a little bit of of of self-promotion. So, in the case for us, we figured that staking was something that people were not really getting used to it after four years and operating mainly in LATAM. And so this year in token in Dubai, we launched our node studio program and we're allowing anyone to run a validator node right now for the New York protocol blockchain for as little as $17 per month, right? And so we believe that staking is at the forefront because it what it it is what we believe and auto autoco compounding

digital savings account. it is using native yield from the protocol and so it is quite safe but again people were not used to self- custody right so they're used to more for paying for software and so that's why we launched the node studio program and so really excited about that one okay um for us it's I'll just echo what you said it's always about necessity so uh for crypto in Africa um in Kenya specifically it came into the market by remote workers looking for uh when when people started trading crypto. It started with remote workers looking for friendlier means of receiving money. Uh before it was always PayPal and PayPal would wake up one day and decide, oh, we can't operate in

Kenya or your account is crashed with 40,000 USD. So crypto came into the picture by remittance workers. And it's always been about finance. Um our currencies in imagine markets from what I'm hearing in the panel, we all seem to have the same problems. um Argentina the currency going up and down. Uh for us it's having 54 different currencies is it in one continent. So financial instruments have what is what has been successful in our region. We have attempted uh Kenya for example is primarily an agricultural country with our developers. the developers that we've trained, there has been a lot of initiatives to try and create maybe

supply chains um to try and create uh maybe loaning platforms for farmers. A lot of initiatives in the agricultural sector, but they unfortunately have not in when we're speaking about blockchain primarily what has taken over is finance, but every other sector is still struggling to come up with good reason. It's always as you said about necessity. Yes. I mean here I I well I will add like in our case CVC has a portfolio of companies and many of them operate in in in emerging markets especially in Africa and as well in other regions like Latin America. Um NEIT is the mother of all trades. So um very important doing

business in emerging markets is all about looking at people. We have uh in the portfolio that CBC has um there is a case of a company called Koala Pay that has been extremely successful. Um it's always like people need to be involved in a sincere way with an legitimate need. That's the key of success and scaling. So um this person um it was very close to aid uh workers you know persons that do do a deliver aid in conflict areas like war or critical uh security areas and it's very hard for for aid u workers and to receive to receive the money and as well for the

funding and then um they created a solution that has been extremely effective and basically has uh streamlined all the hassle that uh people in let's say in conflict areas face to to get uh liquidity or to get money um in emerging markets right now of obviously some of the biggest use cases as Ion mentioned is um related to payments and most of them or many of them come out of emergency right now in Bolivia there is no dollars literally I mean we don't see too much in the news but the situation on the ground is is almost catastrophic. Literally, they

have uh no dollars. You can get maybe uh up to 100 or something in in in the bank. And the black market is sobering like uh the prices are are just um crazy. Obviously, people that do imports and exports, they need access to to dollars, right? Because otherwise, how how can they trade? How can they live? And right now they are using um peer-to-peer um solutions. They are using Binance to to get and then USD USDC most of the traders there they have no idea what is blockchain they have no idea what is stable coins but in a few months they are fully literate and what you mentioned because it's like there is

a need if the solution comes people use it. So it is this is very relevant in emerging markets. All the game is about looking at the people and really addressing their needs. If you have a resolution you will get traction as well for us is very curious because obviously we we know most of uh the change and providers and technology technologically speaking some can be superior, right? But what will go on the ground really is what what is very easy and sometimes for even for me I get surprised like why why they are using drone like I was like why like and but in there on the field very

effective well this is another case and as well there there is as well we we need to consider as well the niche obviously there is like uh the ones for necessity but as well please don't look u the size on demographic fix. There is like the generation said and the younger um the people that are younger they have a different view of what is wealth and what is money and most of the people they they get information and right now often times young young generations will buy first some crypto instead of buying a share. So their first experience with some type of

you know like uh getting expo getting exposure to a product or an instrument will be will be crypto I will be instead of buying a share. So um what is very particular in our regions um well I'm Mexican myself but I've been living overseas in Asia and here in Switzerland for many years. Um what is very relevant is like um the density of the the population. There is huge populations in a range of age that is quite young. So it is for them quite easy to to get technologically savvy if if you know well how to drive them. And then um what where the where the potential drives in

our markets is um is is the mass in there you can get mass adoption. Here in Switzerland there is fantastic things. I mean it's the the market here is extremely well developed and there is so many possibilities but um but Switzerland is tying it's an small market right but in there possibilities are endless. So as Claudia mentioned maybe you you need to work you know you need to invest work with regulator and but if if you really tap into the right niche and get I mean work diligently the the rewards are and and that's why we're supporting uh crypto valley association there right and and with Tilman we work

with the education side as well that's key like we need to educate not only the end user but also um the regulators right the government as Well, private uh private organizations as well, not only banks, right? You got insurance as well. A lot of uh real world assets that are waiting to be tokenized, right? We saw a great project in in Colombia, right? They that they were tokenizing carbon credits, right? And it was a very profitable business. And so, how do you open that up? I think that's something that is still waiting to be unlocked, right? And for us the most important thing uh is one like we like we've talked numerous times the need the ease of use and more importantly like how

friendly it is for people to understand complex financial instruments like there's no financial education at least in Mexico it's very it's it's for the zero 0.1%. Right. here in Switzerland. Yes, that's something that you teach your kids when you get to primary school, right? Savings account that in Mexico, what's that? Right. In Kenya, what's that? Right? Doesn't happen. And so, I believe that that's going to be something of a lowhanging fruit for institutions and uh private and public organizations that really deep dive into how this educating people unlocks value creation that they are going to own because this is very important. people will trust Binance

better than a bank, right? There's no no questions asked for the younger generations. It's like, "No, I'm not gonna open BBBA. Sorry about it. Somebody works there in the bank, right? Some them under the bus, but they rather put their money in lemon cash, for example." Yes. Right. They can trade it for memecoins or they can trade it for whatever, right? And they can trade it with their peers as well. That's something that the bank's not going to enable, right? they will need to get and pardon my English their together because if they don't happen they're going to miss like the largest population in in growth uh in the whole world right and and I'm missing Southeast Asia as well right and so I think that that the unlocking will happen when education comes in with the value creation and allowing the new

generations to really um spearhead projects that that can drive growth for the region yes something really relevant just to to what uh we have an startup uh um their name is um Picnic and this gentleman is based in Brazil. Uh he started out of passion like many years ago working on the space and he he really wanted a completely decentralized solution because he really believes this is possible. So he started implemented it and he he has been promoting and he he has traction. So as well younger people are very open to new ideas. So his business now is thriving and this

week they just launch in Brazil in partnership with Nosis Pay a credit card. So basically people had been doing uh like um owning crypto then completely centralized on on her app but now uh with uh the integration of the credit card people can do on ramp off ramp and he told me I just contact him yesterday and he told me in one week we issue 800 cards and then I mean it's like we just make an announcement and then like yeah one week 800 cards. So in in those markets the potential is huge and the younger guys or the younger people they really get interest they explore they they they really are looking for for new

opportunities. Thank you. I would like to hear Tilmer also about this uh use case and again look looking from from the perspective of of payments. You can guess by my name. I'm not Latino by myself. I used to spend much time of my younger life in Brazil in in Mexico and I'm German by origin but living here. So I have those this both perspectives. So one thing I need to always explain with local banking partners here in Switzerland is that this use case we having in Brazil it doesn't necessarily exist here. What does it mean? So of course in Switzerland we have twinn as an alternative payment method but it get implemented in 2015. It's a consortium

of banks. It's nice to have I think it's only has around 50% of population really using it having an annual transaction volume of close to one billion right tiny amount tiny numbers when I go to the banks and show them the volume we push per month they look at me it's like where does this money come from like we in Brazil it's 300 million people in in 2020 in 2020 the central bank of Brazil implemented something like twin it's called pigs But it was a different approach. It was a top- down approach.

The banko from Brazil said we need now all the fintex to implement everything. So within five five years um pix has now more than 150 million users. I think population dominance is around 80%. It quickly became the main alternative payment method. So now you can see the the necessity in those markets. If you have traveled yourself to emerging markets years ago there was cash they never really made this credit card thing and now it's digital. So you have this necessity of of of people using this in terms of payment. Then of course when we look at crossber nightmare sending money

from Switzerland to Germany again no problem it's there tomorrow right no issue but sending money from Brazil to maybe um a crypto company based in BVI or maybe let's bet it be in Switzerland. It is impossible to push large large sums and I get asked by the banks always the same question. We push volume and they're like what is this? I explained to you it's the same client it's the same recipient and nothing changed. Oh yeah, it's blocked for days. But the problem is that it's it's not that we do something illegal, but our clients, they need this money for operational purposes. So it cannot be stuck somewhere in limbo with with

the intermediary banks. They needed to pay salaries, right? So this is a a big um problem in the region. And I see this uh use case picking up in all the other Latin American countries. Mexico has spay or oxay where you could technically order products online but you pay in cash in a store and the store manages the the the the fiat lag for you right and then in Colombia going on all of these markets have the necessity payments currency deflation give them anything else than local currency and they take it thank you thank you all of you And um those um response are in inspiring and

they are reminding us that crypto in isn't just about um code and capital but also about people right. So thank you. Thank you. Uh we are um reaching out about the end of the of this panel. Uh so looking ahead, what do you uh believe is most needed to unlock the next wave of crypto innovation in emerging markets? Um Ivonne, you start with you. Um well, I think the main point that has gone around is necessity. Um and we have as Claudia has mentioned

uh we have quite a need in emerging markets. For example, in Africa we have the youngest generation. Uh we have a median age of about 19 and we're growing so fast and we're not stopping as other countries we like going the opposite of everyone else. So for the next the first point that was mentioned by Tilma which was regulation. uh for now I I can say the experience in Kenya has been shifty. We there are countries like Nigeria which completely banned crypto, completely banned Binance uh but people are still using it. But in Kenya it's been quite friendly. Um we've had a sandbox for crypto um for crypto

startups by the government but the but we we're still very cautionary. For example, the central bank of Kenya is like okay banks don't accept it but people are still trading it. But at the same time uh I think there's more that can be done by the government by our governments. We still can't innovation will always come before regulation. Uh but at the same time I would wish that our governments are more open to it. Um and at the same time we are really pushing for um uh innovation from ICP hub Kenya. Uh we have so far the the biggest blockchain developer community in the country and uh we've been doing we're having a huge hackathon coming up

next next month I believe and we really want to see what will come from it. We've gone mainstream. We are doing everything right. We are doing everything legally. We're working with governments. We've done so many partnerships and from that we've had a lot of competition from other chains from the work that we've done. And competition always breeds efficiency. I just believe that what will bring the next generation of innovators is um the state of Kinesis where we just don't stop. I think we're in the right direction. So I I think in the next five six years we'll have more opportunities come up, more uh startups coming up, more you know. So I do believe what we're doing is the right path.

Thank you. Thank you Ivonne. Um, Dilar I think mainly looking how to get more users right in the case of Brazil it is yes we need regulation but our experience has been we have been always a little bit earlier than the regulator then regulation came the regulator look looks at who is there already it was us okay give them the license they know what they do right so I think the adoption here really is what I'm looking for is simple UX UI If you sign up on Binance, yes, maybe the people in the room get it, but the normal person from next door has no idea how to sign up in Binance. So, it needs to be simple, straightforward. In the beginning, leave

out all these DeFi uh token, coin market cap, page six. Give them BTC, ETH, a stable coin, maybe USDA, a yield generation stable coin, and that's it guys. And that will drive adoption, easy user friendliness. Um well here I'm adding to what Tilmer say um very relevant just um I love this saying don't um don't tell me what you want to sell uh offer me what I want to buy so critical address look at people address their needs and really really follow and

listen to your target market and develop it. It's like it's as simple as that. Like it's all the keys with people and and why because basically when you offer something that people are really using um often times what I have seen in the space is like when there is massive traction then it is too hard for anybody to stop. So they have to comply. I mean the the when when there is something that uh is massively used then neither the regulator neither whatever can can say no because just you you you'll reach this critical mass and well it's it's difficult to stop. So uh

it's like bitcoin or all the cases we have seen in the space. So my advice is if if you are building something just get passionate, listen uh find your niche, listen to your people and and be very very diligent. And um well some of the biggest organizations that uh in in the space they went full into it. They apply and they got the critical mass and then regulation came. Then this this is something you have to solve of course but if you wait too long uh well nothing nothing will really happen right. Yeah.

Yeah. So for me the most important thing that's going to sprout innovation is one uh regulatory clearance I think it's important but many of us that operated in 2021 or 2020 we did it with no safety nets and no regulatory clarity. Uh that kind of hurt us a little bit on mostly on the staking side. But I think the most important one that is coming up is you're gonna see stable coins for the Mexican peso. So Peruan soul, right? You can excite it for Colombian pesos as well. Then the different uh liquidity pairs there. So there's going to be very very big arbitrage opportunities there.

And I think that's going to sprout the next wave of of innovation and allowing fintech applications to really bridge the the crypto or blockchain technology with TrackFi and then I think a mixture there and a hybrid model will come out of there. So yeah, really interesting stuff to see the next coming months for sure. Yeah, for sure. Thank you everyone uh for sharing your uh insight and okay I'm going to h give a pause a pose and if you any if any of you uh want to ask a question for our speakers this is the time to do it so anyone yeah we actually have just one minute so we'll have one

question you were fast on the draw thank you very much I so I heard a lot of needs It's like uh crossber um transactions and I heard has saving the money in Argentina in order to have that money tomorrow as well. What about local day-to-day payments? Is that a need? Yes, sure. So, so this was addressed basically by Marcalo Pago, right? Mealo Pago now has uh crypto payments right in Brazil and in Argentina, but not regulatory clearance in Mexico for example. You cannot use it. You cannot use stable coins or bitcoin to pay somebody in Argentina. So that's still something that crossber payments still not there but that's a big opportunity right but it's being used for day-to-day

payments at least in in LATAM. Yes. Yeah. I could add for Kenya we are seeing Binance be really doing well cuz it's free it's fast. It's immediate. So and I'm seeing them in local shops. They're setting up like stands and boots. So I think it's a need and it's working. Yeah. Thank you very much. Thank you Ellie. We are about to finish. We're all out of time. Thank you all so much for joining us today. Uh thank you all also for joining us for the first panel here in the Audi MIDI room. And again, a special thank you uh for the parts of our panel that came all the way from Mexico. Um and all of you for sharing your knowledge with us today. So thank you. Thank you everyone. How would I say?