Diego Fernandez: Stablecoins Are A Life Saver In Argentina (And What Comes Next)

Transcript

So Argentina has been sort of a victim of maybe the worst economic decision making for the last 70 years. >> What is the status of payments when it comes to crypto payments in Argentina? >> And as we had this sort of capital control, very aggressive capital and controls. Crypto be became again a way of uh getting that money in Argentina. >> Welcome back to the home to learn from the biggest guests, the brightest [music] minds at the tip of innovation. Our goal is to help spread the collective knowledge of everyone in our community. We are breaking crypto out of its [music] echo chamber and taking it to the real world. Sit back, relax, and enjoy it.

[music] [bell] All righty, guys. We are here with Money Moves Fast, episode number 10. We've got Diego Fernandez, the co-founder of Sabra. Money moves fast is our premier weekly payments, tokenization, and RWA show here on Rollup TV. No one better to have for this week other than Diego coming live from Buenosirus. We will be there with him very, very shortly. One of the premier hubs of crypto and blockchain where the use cases far surpass speculation and hype and are drilled into the everyday use case for the average folk. Diego, pleasure to have you, man.

Andy, thank you so much for inviting me. Happy to be here. >> How's the city, man? How's the city? What? It must be picking up already. >> Well, I mean, the city is crazy as usual, but [clears throat] now with the added decon stuff, honestly, I cannot be sort of a precise about because I love the place so much and I'm convinced that most of our visitors for decon will love it as well. We are very charming people. You'll have tons of Asado. Hope you're not vegan or whatever. Uh, beautiful wine, amazing weather, and people are so excited about that connect. I think we will have thousands of guests and and everybody's really excited about it.

>> Yeah, man. I mean, I put out this tweet um that got some push back about it. Maybe you could answer this real quick. I think this would be helpful for for the people. Uh, you know, I put out this tweet saying, "Bonosa will be one of the best locations for a conference for the Ethereum community. Uh, easy taxis, very safe, perfect weather, great food and cheap, beautiful Euro architecture, feels very homey, fun, nightife. I got quite a bit of push back from people saying very safe question mark. Buenos Iris is not safe, unfortunately. Very safe, not safe. So maybe you could just give us a quick rundown as to, and we'll clip this. How to be safe in Buenosirus?

How how do how does the crypto how should we act in Buenosirus? How should we dress? How do we stay safe and stay out of trouble down there? >> Honestly, and this is not my impression. This is a hard data. When Osiris has the lowest homicide per 100,000 inhabitants, I think that in all of America now. So, Buenosirus is objectively a very safe city. Of course, you have certain places in Buenosiris which maybe you shouldn't go out at night, but trust me, you're not going maybe you shouldn't go out at night with an iPhone 17 Pro Max doing like this or I don't know a 20,000k uh 20k [clears throat] watch, but trust me, you're not going to

be there. I mean, you'll stay in neighborhoods where where I live in Palmo, which nothing will happen. nothing you can get a chance of if you're I don't know doing like this on the street someone comes and and pull your phone out the same thing happens in New York in any other European city in my perspective Buenoseris is a perfectly safe town and in everybody that comes can be very very comfortable with it and I hope that you enjoy it >> and that's how I feel too I mean I was saying like look I mean I've I've lived in Medí in Bogotaa in Sa Paulo in Rio, in Nicaragua, in Panama,

and you know, I've I've been around the block. I've been in many places that I should not be at late night hours. And never in my time in Buenosirus did I feel threatened. Did I feel under fire? Did I feel like I was going to be threatened. So, man, let's get to the meat and potatoes here today. Buenosirus, Argentina is is a is an economic hub for for the the southern cone. It it is a a city of culture. It is a city of of um art, of food, of wine. It's also been a country that has been plagued with questionable economic uh decision-making from the highest of powers. Um crypto as a technology has absolutely infiltrated the countries that have needed it the most primarily

with stable coins. Maybe we could talk a bit about how like the state of of of blockchain adoption in Argentina and and kind of why stable coins, why Bitcoin and these store value assets have been so important and just generally kind of like what the evolution you've seen over the last couple years as far as adoption has look like. >> Well, first of all, thank you for being so mild about questionable economic decisions from governments in Argentina. That is honestly a complete understatement. I mean there's this saying I don't know who was the guy that said it there's developed countries there's underdeveloped countries Japan and Argentina which are two unexplicable

cases. So Argentina has been sort of a victim of maybe the worst economic decision making for the last 70 years and we have had I don't know inflation I think 65 out of those 70 years and when I say inflation I mean crazy inflation it's not two three four 5% is 20 100 200 and even thousands of percentage per year of inflation and uh [clears throat] the government before the government that we have now started taking these measures as for example not allowing people to to buy dollars. So when you have these pesos

local currency in your hand with a 20% per month inflation literally demand melts in your hands. So what do sort of people try to do? Hey this money is losing value each day. So I have basically two alternatives. I buy things and spend my money and buy whatever thing. I buy a car if I can or I buy a refrigerator or I go out and have a dinner, but I prefer to spend my money. I'm not keeping it. And the other alternative is I'm going to preserve this kind of shortterm store value. I buy dollars and by that way I'm preserving the value of my of my money.

And that's that is so so so embedded in Argentine culture because of 70 years of mismanagement of the economic situation. So crypto got into Argentina in my perspective from two different sides. We have a really strong foothold in developers and and and really deep tech guys doing amazing things in Argentina starting with the Volterhouse something like 10 years ago where many OGs from the Ethereum community came out open sapling and others [clears throat] uh lambda class working for 10 years in crypto and so on. So we had this sort of talent in Argentina which is one of the basis for crypto to to really get its

momentum. And on the other hand side we got this sort of very bad situation in we in which we as Argentinians needed crypto as a means for survival for economic survival. So in crypto in Argentina is not an online 247 casino. It's not a dig stuff. It's not it's not a mecoin thing. is something that provided regular folks which didn't know a thing about crypto say, "Hey, instead of going, I'm I'm speaking literally with a bag a bag full of pesos just to get $2,000, I may use this app and buy cryp crypto dollars." Oh, this is amazing. So I get

my salary and instead of seeing how my salary loses 10 15% of its value over 30 days, I can get into dollars and then come back. So that that was a way of survival for us and many regular folks which if you wanted to buy I don't know 20k in dollars. Okay, maybe you had the way of doing that because you're kind of more sophisticated. But what happens if you I don't know want to buy $200, $300. Okay, that is very very was very uncomfortable to the innocent. So crypto and stable coins mainly as you mentioned became a way for Argentinians to survive. But once they got into crypto some something very interesting started to happen. I was speaking with uh Cello

which is the founder of Lemon is the biggest crypto wallet in Argentina and just a couple of months ago he shared with me that for the first time BTC and holding in their users accounts exceeded stable coins. So they got in first stable coins but then they sort of say hey come on something is going on here and started migrating part of their holdings to BTC and it so today of course there's not a very precise uh estimate but we estimate that between 20 to 25% of the population holds and knows crypto. Of course I'm not meaning again legions but they hold crypto in their

wallet. They have a crypto wallet and they use it to maybe they have a card or a lemon card, a metam mask card or whatever, but they have crypto as part of their lives and not because of gambling. So for me, that's that's a very interesting thing that's going on. >> Asset management redefined built on [music] ERC7621. Standardize how you launch, manage, and trade onchain baskets. This is Alvara, the standard for onchain asset management. The wait is [music] over.

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talking about earlier how if you go down Florida Avenue, you know, you will see you will see and hear Comio Comio Comio >> Comio Comio. >> It is absolutely a part like if you guys are watching this right now and you're going to Buenos Cyrus, you must go down Florida Avenue to get a sense of what it's like to exist in in these types of places. >> You know what? We have a local slang word for that which is called armolito which is little tree. >> Little tree. So those are the little the little trees. Say cambio cambio cambio.

Cambio. Yeah. >> All right, man. Well, so let's let's kind of formulate the payments landscape here. Is there a lot of activity between like uh the United States or other uh other countries sending remittances back to Argentina? Uh I know that happens a lot in Mexico with the US and you guys are doing some work down there as well which we can get in. But you know as far as the payment space goes in Argentina, who is dominating that? What is the preferred stable coin? What is the preferred application kind of what is some of the you know volumes and velocities like kind of what is the status of payments when it comes to crypto payments in Argentina?

>> Well, I I wouldn't say that remittances to Argentina are the main income from foreign from foreign countries. We do have a lot of income from foreign countries coming from freelancers and people doing whatever services graphic design code you know whatever offshore and as we had this sort of capital controls very aggressive capital and controls crypto be became again a way of uh getting that money in Argentina and several different wallets started offering you the services of saying hey you get this crypto wallet we open for you uh a We give you a bank account in the US. You can get fiat money there

from your customers and we put crypto dollars in your local uh in your local account or we put crypto dollar in your wallet. So that is that was that is and was a very strong way of getting money in the country and we do have a strong remittances going on with mainly Parawai, Bolivia, Venezuela which lot of people from Parawaii, Bolivia, Venezuela, Peru maybe came or come to work to Argentina and they want to send money back to their families. Yeah. So there is a money going out of the country but there is again a very strong uh a very strong strong play there and we do have a very strong connection as well with Brazil because we Argentinians

spend holidays and and visit Brazil very regularly. So in the payments arena as you were asking well we have a sort of a behemoth of players here which is Marcado Pago. Martago is a company controlled by Martado Libre which is uh a platform a local a local regional platform in the ways of Amazon which they do have a a payment railway so which is Marcado Pa which is dominates I don't know 80 or 90% plus of the market we do have all of the fintech scenario with there wala it's a very important fintech and and brewback and several others play in that arena there is

traditional fiat uh fintex and then we have the crypto wallets. I would mention lemon. I would mention uh bellow I would mention when but it's it's a very sophisticated market. We in Argentina and when you guys come here are gonna see it our we have basically the two most important means of payments are using NFC chips with credit cards or or or Apple Pay or Google Pay and we do use a lot QR codes.

So we scan a QR code and you pay with your wallet maybe a crypto wallet maybe the Marcado P wallet but we use a lot of payments using uh QR codes. So digital payments are very strong here in Argentina. We're very used to that. >> Yeah. And so are is there any actual stable coin payments happening on the ground floor there when it comes to like POS systems like proof of point of sale systems? Are they accepting stable coins in any capacity? You know, I've seen sometimes I see a little sign of like USDT or BTC accepted here at some out of out of you know, kind of a random coffee shop or something. what's kind of been the the adoption with regards to

accepting blockchain based payments in >> I would say that that is just starting. Yeah. Today we have this sort of shortcut which is crypto wallets that allow you to hold your assets in crypto assets whichever PTC, ETH, US, USC whatever and you can go and do a regular payment using a QR code or or a credit card and they do transform automatically your crypto assets to the local currency and that has become quite popular. I mean nearly all of us using whichever crypto wallet use that type of service.

Native cryptoto crypto transfers is something that is just starting. It's not as popular. It's quite a niche thing. I would say sort of MVP style. But of course the the what all of us hope is that that is going to change real fast. And in my view that should change in two ways. Of course, we have the cryptonative users which will allow to have USDT, USDC and or BTC or whatever and pay using their crypto asset to a crypto asset wallet.

And I think that what we will start to see is financial services and fintex companies that use crypto railways because they're much more effective and safe than trai railways but show the user sort of a track five web two interface. So maybe my 85year-old mother doesn't need to get into the understanding of USDT, USDC or whatever. She she just has a wallet where she can save money in and then she can go and pay for the groceries and maybe that wallet and that fintech company is using crypto railways but as a back end yeah in the front end the regular user doesn't even get to know if the dollars are USDT USDC crypto

pesos or whatever. >> Yeah, I think I mean that the latter point there is where a lot of the I think players are trying to get to, right? because at some point you just want to stick to the same thing that you've been doing as a consumer but just have a better experience and a better product and so that's going to take time to get to where like the Visas and the Stripes and the Marcato Libres of the world you know accept the stable coin settlement um and then once that happens then that then the adoption should really really pick up. Yeah, I I agree with you and and I think that the complex thing about crypto is that we have this sort of uh the crypto assets, the native crypto assets, BTC, ETH, and all of the rest.

You need to sort of be inside the thing to understand them. Yeah. To say, "Hey, okay, I'm going to buy BTC." That's an investment decision. But regular folks doing everyday shopping, everyday grocerying, and whatever, maybe they're not willing to spend their time in understanding that type of thing. They just want a means in order to do their financial transactions to to keep on with their everyday life. And I think that this type of offering where when you abstract the the sort of the crypto back end which is again much more effective and safe definitely has a place in the market because uh just to give you a small example we in Argentina when you transfer money from one bank to another

there's a sort of union of banks which created a company which is called coala which is basically a sort of a compensation arena in which if I send money to that bank and the other people send the money to the bank and the other bank calls you they they sort of keep that thing going on and transfers money between bank accounts of all the banks in Argentina. I am positive that 99% of people using that system don't know that that system even exist and that's okay.

we are kind of financial sort of cryptoners of course kn do know about that but I mean most people don't need to understand that or and I think that that's okay >> I totally agree I totally agree to I' I'd like to understand a bit of the work that you guys have been doing with human ID and this kind of decentralized ID system in Mexico you guys have recently launched one of the first largecale decentralized ID systems you know how' that process happen you know what was the story behind that and you know in the lens of stable coins of payments of this kind of onboarding users on chain what does that really mean for the Mexican people that's a very good question thanks in

our view all of the world transactions of trust and value is one of those will be dominated by railways today we have different railways for different type of things that we need to preserve and trust So we have one railway for doing money transactions, one railway for doing sort of I don't know whichever document contract or thing that we need to sign in order to sign a contract or owning a car, owning a house or whatever.

When the financial system that is happening right now goes into crypto railways and the trust system I mean the first thing that you need to trust on is who you are your ID goes into crypto railway the interoperation and the effectiveness and the reducement of fraction that we will friction that we will have will be immense. So it makes every sense to say hey everything should be put down on crypto railways. You should be able of verifying identities of human beings of things of cars, boats, houses and whatever using crypto railways and saying hey this issuer whoever that is this big company

this small company this national state this subnational state issued this holder a credential and I should be able of verifying that very safely very cheaply and that will change the way we work and we're really proud about the noon thing. We'll be doing some big announcements during them connect regarding other subnational big jurisdictions adopting these type of systems. We use open-source protocols. We're using we have a chain a layer two chain based on ethx client developed by lambdacas which is using a line layer technology to reduce costs and make it

much more effective and we use the quark ID protocol which is an open source protocol for identity. So we we pack all of these together and we offer this type of solutions to governments to big institutions and uh we're really happy because we're gaining very big adoption. We're gaining big traction. We have a huge pipeline and the most important thing in my point of view is that of course it's important that governments issue their sort of driver's licenses, citizens credentials, birth certificates and so on blockchain but the most important thing is that that creates a local ecosystem and then a regional ecosystem. What I

mean is, just to give an example, if you have a shop, I don't know, whatever, a restaurant, uh, a gym, uh, if you own a building and you're able of sort of leveraging what the government does and say, "Hey, I'm I am able to verifying this guy's identity, just showing a QR code." Yeah. Or tapping an NFC chip and instantly with no cost, I get that verification ready. Well, that is so different that what we do now today in Argentina you will see it's very common that when you need to enter a building or whatever say hey do you have an ID and I've seen this in the states in Europe every place do you have an ID yeah I do okay show me your ID and you show your ID and people start maybe

taking notes in a computer that doesn't make sense today of course we need adoption but it's so weird we have an ID maybe that even is digital or not but I mean you have a piece plastic and then you have a computer and you have a human interface transcribing things from an ID to a computer. That's crazy. We should be able to verifying that instantly. States have a big role to play there because they are the most important credential issuer in every society starting from driver's licenses, passports, nationalities and whatever.

And the whole ecosystem may and will take advantage of that. >> Blockchain shortcuts, templates and widgets launch without friction for builders by builders. Visit enso.build. Habachi provable. Trade pers with speed and security. Earn rewards. Visit habachi.xyz. [music] Trading on fire. Yeah. I mean, I think for sure and I think some some of these nation states are getting in their own way, right? Like you've called verifiable privacy the foundation for human freedom. But when it comes to these kind of governments who don't want to let go of control, it it's it's kind of hard to to make this balance. So I'm

curious, how do you make that message resonate with the governments that still feel or still fear this digital age or they fear this decentralization kind of mindset? How do you make that message stick with some of the people who are some of the most powerful in the world? Well, I think that we we all should do this kind of crusade because people are not so and and I published an article I think it was last week regarding this digital identity is a extremely powerful tool but it can be used so wrongly if you do it bad so wrongly digital identity is like a hammer if you need to put down a nail it's an amazing tool but you can use a hammer to kill to kill

one. So it's very very very very dangerous. Centralized digital ID systems are everything that's bad. There are digital cage in which every movement that we do will be monitoriized. You could suffer censorship. It's kind of a I don't know Nazi like state. And uh the argument that hey we want to do this in this way to prevent whatever crime or is a bad decision. It's a bad decision. It would be the same as saying hey I'm going to install a camera in every bedroom and every private home in order to prevent a potential crime.

Maybe you do get some crime lower down that is not the way to go and we wouldn't be able of allowing this kind of big brother state. Same thing happened with identity. I think that there are a lot of amazing institutions doing a lot of great work in toward to promote this idea of hey guys you must not do a centralized identity and monitor everything that society does that that is bad and we have very important players in Latin America. We have two development banks the IDB and the calf which is CAF corporation for mento which are really struggling moving towards this. we have uh UN and several other institutions sort

of promoting this good way of doing things and several governments are starting to understand it for me it's not something that is yet defined and we need to keep on working really hard in order to promote this idea and for me that is very important and the other thing that uh that I think that we need to all of us struggle together is hey guys please abort the private blockchains initiative. I'm going to pick up an EVM and I'm going to do a private permission blockchain which I control. No man, that is the internet of the ' 90s. It's not the way to go. We need to rely on Ethereum's economic security. We have 100,000 plus

nodes verifying our transactions. We have billions of dollars securitizing the information that's inside. But we need a public blockchain in order to avoid censorship, in order to avoid people controlling us. And I think that that tendency today is much more smaller, but it's still there and we need to fight it. >> Yeah, I totally agree, man. I mean, it's part of this whole return to fundamentals ethos that we've been trying to really iron into people's minds and ingrain into the industry. And I think that really you're you're capturing a lot of that today. Diego, as we kind of come to a close, you know, any final remarks for those coming to Buenos Ares, coming to your lovely country, uh h how will you welcome them?

Any big events that you are hosting or that, you know, where can we find you in the city? >> Well, uh we have we hired this amazing venue just in front of DEP connect uh with Lambdi Group and we're doing a bunch of events there. We have a an amazing GOP free summit which is people from governments all over the region that are coming precisely to a crypto event which is something I wouldn't say it's the first time but it's something really interesting to see and there are a bunch of events going on there the the amount of side events that we have is it would be so hard so hard to really choose which event to go other people

are doing amazing events and so My recommendation is do not eat for the last four or five days. Eat very little. You have amazing food here. Amazing food. You don't need to bring anything. Come here and try wine. Wine is a very special thing in Argentina. Don't forget about trying mate, which is a very local drink that we have in Argentina. We I will show it to you. This thing over here. Yeah. >> Yes. >> We do that all the time. Yeah. come and try mate which is this very very awkward thing and my last recommendation is I know that coming to Argentina from the states from Asia from Europe is a long trip so my recommendation is Argentina

is a big and beautiful country make your stay as long as possible go to Patagonia go to Salta in the northern part of Argentina which is amazing go to Iwasu Falls which is out of this world uh there there are lots of things to do And we're really so happy to have you all guys here next week. >> Beautiful. Diego, thank you for your time. Thanks for being a part of the roll. We'll see you there. We are hosting an event at that space with Lambda on the 18th. So looking forward to that, man. >> We'll be there. Bye-bye, Andy. Bye, Diego.