Recently, Bárbara González Briseño, the Head of Finance at Bitso, Mexico’s first and largest crypto exchange, talked about her company’s partnership with Californian FinTech firm Ripple.
Bitso, was founded in 2014, and its backers include Ripple, Coinbase, Digital Currency Group (DCG), and Pantera Capital.
It last raised funds, via an investment round led by Ripple, in October 2019 in order to allow it to expand into other countries in Latin America (such as Argentina and Brazil).
As Asheesh Birla, SVP of Product & Corp Dev at Ripple, explained in a blog post published on 14 October 2019 the reasons for Ripple’s interest in Latin America (and especially Mexico) and its investment in Bitso:
“In 2018, remittance flows into Latin America and the Caribbean increased by almost 10%, with Mexico receiving the largest amount of these payments in the region with over $35.7B transacted every year.
“Remittances are vital for the economy and an important source of financial support for many households in the region. Technologies like blockchain and digital assets could transform the remittance landscape by making it easier, quicker and cheaper to send money across borders.
“At Ripple, we are building new rails and working with our infrastructure partners to make this future a reality.”
Birla also talked about what he thought when he first met the Bitso team back in 2014:
“This four person shop is able to send money across borders with technology faster than the big banks. That’s incredible.”
He went on to talk about Bitso’s role in RippleNet’s U.S. – Mexico corridor:
“This innovative company plays a vital role in RippleNet’s US – MXN corridor by providing critical liquidity for payments. Earlier this year, Ripple launched On-Demand Liquidity (ODL) capabilities with MoneyGram into Mexico, with Bitso as the key exchange partner. As Ripple expands ODL in Latin America, so too will our partnership with Bitso.”
In an interview (released on Thurday) with Ripple, Bitso’s Head of Finance explained how her company had benefitted from its partnership with Ripple:
“With help from Ripple, Bitso is the now the largest exchange in Latin America. We have the world’s largest liquidity of Mexican pesos to digital assets and are MoneyGram’s key exchange partner for remittances into Mexico.”
Briseño’s experience in the world of finance gave her a painful lesson how slow and expensive traditional wire transfers are for cross-border payments:
“I knew that every time I needed to pay a global supplier it would be a hassle. To set up the transfer, I had to complete a form, sign it, scan it and send it to the bank, then wait days for them to purchase the dollars required to make my payment.
“I never knew at what stage the process was at when the supplier would receive the money.
“That’s my experience as a corporate customer. It’s an even bigger problem for retail customers, especially families whose rent, groceries and educational costs depend on remittances from relatives working abroad.”
Near the end of 2018, Bitso started building a solution that could adequately address the problem of sending money between the U.S. and Mexico.
This is what she thinks of Ripple’s XRP-powered On-Demand Liquidity (ODL) service:
“ODL is amazing. The transaction happens instantly, is much more cost-effective and you know exactly when the recipient receives it.
“Just a few months after starting work with Ripple, we were able to offer a fully functioning solution to our partners.
“Since July 2019, we’ve seen a major increase in adoption as well as the volume of transfers we’re facilitating.”
She also talked about Mexican workers in the U.S. who wish to send money back to their families in Mexico:
“There are millions of migrant workers in the U.S. who send money back to Mexico.
“Their families are often surviving week to week on these remittances, so the immediateness of ODL versus the traditional process that took days is significant.
“Also, the costs are a fraction of wire transfer fees so more of the sender’s hard-earned money makes it back to their family.”