US crypto platform eyeing Brazil, Colombia, Peru

A US cryptocurrency platform that makes it easier for investors to spread their risk is upbeat on Latin America and bullish on the future of the industry despite a fall in prices seen this year.

FreshWealth - which offers customer support in English and Spanish - has the region's No. 1 economy and two others in its crosshairs.

"Because we know Brazilians have a strong appetite for cryptocurrencies, I think Brazil is particularly interesting, but at the same time, I have heard that Colombia and Peru are really growing markets," FreshWealth CEO and founder Jennifer Nash (pictured) told BNamericas.

"Internally, we're very enthusiastic about all of Latin America and I think we would underscore Brazil, Peru, Colombia as being potentially receptive countries," Nash said.

Citing reports and demand for alternative investment options, Nash said in Latin America, in countries including Brazil and Peru, people are opening more cryptocurrency accounts than bank accounts.

In the region, about half of the adult population is unbanked but smartphone penetration is high.

THE PLATFORM

Launched this year, FreshWealth is targeting "the everyday additional investor," said Nash. "Our goal with FreshWealth is to help anyone who wants to buy digital currencies - do it as safely, and wisely as possible."

Investors can choose from various bundles of leading coins or purchase coins separately. Minimum investment is US$50. New York-based FreshWealth invented the crypto bundle purchase method.

A Spanish-language version of the website is due to come online by the end of January. The company plans to then translate its website into French, Russian and Portuguese.

Before launching FreshWealth - owned by Canadian internet service provider pioneer Rob Hall's company Momentous - Nash was part of a team that helped develop the IBM Watson AI investment platform.

THE FUTURE

Prices of cryptocurrencies, including Bitcoin, have fallen this year, leading to speculation over their future. Some investors, however, are taking advantage of the dip and Nash said the asset class is here to stay.

"I think there are two schools of thought. As cryptocurrency prices fall, you see investors hesitating to go back into the market or to get into the market for the first time. But at the same time, the more savvy investors are thinking 'you know, you buy on the dip.' The interesting thing that we're seeing, is, perhaps, less enthusiasm from total newbies but extreme enthusiasm from people as the prices drop; they absolutely want to get in on the bundles.

"I think the future of cryptocurrency is solid," said Nash. "It's not going to go away and I think that is a common misconception. I think newbie investors sort of hesitate to get into the market because they are literally sitting there thinking, 'oh maybe it will all go away.' It's 10 years old, it's not going away."

Nash cited the potential of the practical use, or utility, phase of cryptocurrency adoption as a key driver.

Nash said: "Behind the scenes, practical uses for different blockchain applications are percolating. And I think as those different solutions continue to bubble up, more utility will be found. And I think through utility people will see and understand just how needed this is as a solution."

Nash also cited the volatility of currencies in sub-Saharan Africa and Latin America and the need for alternative means of payments in these regions.

"To some degree, cryptocurrencies are valued as an investment but also they are backed by utility. You are investing in both, the same way people invest in the traditional markets."

REGULATIONS

In Latin America, and across the rest of the world, the growth of the cryptocurrency market has prompted governments to tackle the issue of regulation.

The general message from governments and central banks is they do not want to hamper innovation but that cryptocurrency trading must be regulated - particularly to protect the financial system from money launderers. Proponents of regulations say it is important for players and potential investors to have clear rules of the game.

Countries including Spain and the Cayman Islands "while not recognizing cryptocurrencies as legal tender, see a potential in the technology behind it and are developing a cryptocurrency-friendly regulatory regime as a means to attract investment in technology companies that excel in this sector," the US Law Library of Congress said in a June report.

The most common strategy adopted by authorities in the region, including those in Argentina and Brazil, is issuing notices about the legal differences between cryptocurrencies and actual currencies, and potential risks associated with investing in cryptocurrencies.

Among the cryptocurrency regulatory trailblazers in the region is Mexico. And Chile is following suit.

Venezuela's government, meanwhile, has launched its own cryptocurrency, the Petro, while Bolivia has banned cryptocurrency activities and Colombia has blocked the entrance of the virtual currency market into the financial system.

On the issue of regulations, Nash said: "At the end of the day, we're very focused on safety and security and ease. We want it to be a seamless and positive experience for investors. If regulation is underscoring investor protection, then two thumbs up."