WBD193 Audio Transcription

Bitcoin World #3 - Colombia: Bitcoin, Regulation and Ties to Venezuela with Mauricio Tovar Gutierrez & Alejandro Beltran Torrado

Interview date: Tuesday 11th February 2020

Note: the following is a transcription of my interview with Mauricio Tovar Gutierrez & Alejandro Beltran Torrado from InTiColombia & Buda. I have reviewed the transcription but if you find any mistakes, please feel free to email me. You can listen to the original recording here.

In this interview, I speak to Mauricio Tovar Gutierrez & Alejandro Beltran Torrado, part of the Bitcoin community in Bogota, Colombia. We discuss the politics and economics of Colombia, Bitcoin regulation and their close ties with Venezuela.

“It’s the magic of Bitcoin, when you are having trouble with your country… in Africa, in South America, Latin America you see that Bitcoin works.”

— Alejandro Beltran Torrado

Interview Transcription

Peter McCormack: Good morning Alejandro, good morning Mauricio, thank you for your hospitality in Colombia. Nice to sit down with you and talk about some Bitcoin.

Mauricio Tovar: Thank you for having us Peter.

Alejandro Beltran: Thank you Peter.

Peter McCormack: Right, so before we kick off and get into things, let's just do a little bit of background on both of you so people know who we're talking to. So we'll start with you Mauricio, just introduce yourself, tell people what you do, tell them a little bit about yourself.

Mauricio Tovar: Yeah of course. I've been working in technology for my whole professional life, the past 10 years and we start our research group in the National University of Colombia nine years ago, to work on ICT technologies, cloud platforms, mobile app application, things like that and four years ago, I learned about Bitcoin and I went to meet ups. I didn't understand anything about this technology, but I saw software developers talking about Bitcoin and money and I saw that was something interesting on that. It wasn't my specific area of interest, but I saw something. So I started to learn to think about this and how to apply this in Colombia and we started with the ViveLab Bogota that it's an innovation digital lab to work on Bitcoin and blockchain technology.

Peter McCormack: And you Alejandro, please introduce yourself and tell people a bit about yourself.

Alejandro Beltran: Well I came from a traditional banking system because I was a stockbroker about 10 years ago and then I started to be an entrepreneur and started to explore new technologies. I started with crowdfunding, maybe as an opportunity of at traditional financial system and then I met these Chilean guys from Buda.com and we started SURBTC, which was a Bitcoin exchange. I started to know about Bitcoin and what the hell is Bitcoin.

As a stockbroker, I didn't realize that Bitcoin was real. So I started to study more about this technology and decentralizing system. So then we started and we founded Buda.com in Colombia and then about four years ago that I'm doing this, I'm exploring new technologies, we start the Blockchain Colombia Foundation that is NGO that are working for education development and communication with public institutions. Then we are here and speaking about what connect to us that is Bitcoin is real and the best!

Peter McCormack: Fantastic, thank you! Thank you both for agreeing to do this. So one of the things I wanted to do this year, it's like a goal for me, but Bitcoin was based on my experience of last year and going into El Salvador and learning about a Bitcoin project there. I thought it would be very useful to travel around the world, visit different countries and find out how Bitcoin is being used, the different use cases, because sometimes personally, I'm guilty of thinking of the Bitcoin user experience of one that just suits me.

Yeah I've got my hardware wallet, I've got my BillFodl with my backup keys hidden in a specific location and what happened in El Salvador, I met a community of people who were using Bitcoin and it was being used to keep kids off the streets. They would earn Bitcoin and be able to spend it locally. But these people don't have a hardware wallet, it's the first thing they don't have. They live in a house, which is essentially a hut which anyone can break into.

There's nowhere to hide a BillFodl or something, so I realized then there has to be a different consideration for something such as private key management. So just that experience alone made me think I wanted to go around the world and visit places and as you both aware, I went to Cúcuta yesterday and that was a very useful experience. But I think to get that holistic view of how Bitcoin can help people across the world, you've really got to get into the locations and understand the dynamics of the country.

You've got to understand the politics, you've got to understand the economy, you've got to understand what people's lives are like and so the goal really for this episode is to learn a bit more about Colombia. So the starting point is, tell me a bit about Colombia today. Tell me a little bit about Colombia politically and economically, because based on here in Bogota... I always say it wrong, Bogota?

Mauricio Tovar: Bogota.

Peter McCormack: I keep saying Bogota! But based in Bogota, it seems to be a thriving, fairly successful city. I've heard Medellin is great now, I've heard crime or I'm aware crime has fallen heavily, yet Colombia has a history which is for me, as somebody from the UK, the main things I'm aware of historically has been the drugs trade and the paramilitary movements and FARC specifically. So I don't know who wants go first, but it'd be great to just get an understanding of where Colombia is politically right now and economically.

Mauricio Tovar: I can jump in. Right now Colombia is the Latin American country that have the highest growth rate of 3% of the GDP. In the political side, we have a right wing political party in the government right now.

Peter McCormack: Is that a centre right?

Alejandro Beltran: More like Republicans maybe and people from the conservatives that is one of the leadership right here in Colombia. The leadership of the political side of the right is the leadership of the government and well, the government is about the innovation and all the economy around the technology and the new technologies. But well, it's a very great discussion because the public institution is very different sides, very different thoughts about what's next on technologies, because they have some control.

Is not a capitalist system, is more like a... I don't know what to say, you have all the control of the system. So you don't open these opportunities when you see maybe in the US or maybe Europe, they are opening to new technologies, because they know that they are changing. Right here is more conservative, more restrictive, is my experiences.

Mauricio Tovar: There are some good things. Maybe we have to present both because it's through what Alejandro said. But the actual president, I have to say, is the president that knows better about new technologies, and he's doing some bets around that. For example, he started a high council of digital transformation for the presidency. They start with the World Economic Forum at 14, this Revolution Center and he knows about these because he's working there in the IDB in the past.

But on the other hand, there is some restrictions from, for example, the regulator of the financial system in Colombia. Then they send some letters to the banks saying that they cannot use buy, sell or anything with cryptocurrencies and that is having a lot of consequences in the ecosystem because for example, the changes have some problems to open bank accounts.

But also, for me there is a risk for the country because everybody in the world is doing some research and doing some projects on this, and the banks in Colombia cannot do it. So it's a risk because the competition is not local anymore, the competition is global. So all of these companies like... I don't know, Libra, Facebook, the digital currency of China, they're doing things and in Colombia we are not doing. So that's a risk for the country. So there are both parties, like very good the speech of the president, but on the other hand, the regulator to have a lot of restrictions.

Peter McCormack: Okay, so we'll come back to the regulations and the restrictions around the Bogota. I just want to get a bit more into what the political status is. So, the current president is Ivan Marcus. What is the name of the party he leads?

Alejandro Beltran: Central Democratic party.

Peter McCormack: Okay, and they've been in power for two years? Previous to his party, was it also a right party?

Mauricio Tovar: Yeah, it's more like centre party, but I think it's more centre-right party because our governments, about 20 years ago since Alvaro Uribe Velez from the right party took the government, the government was a right president, so at this moment we are living a violent situation about social leaders that are actually in in the cities, maybe the places that they are working. So we are living a new kind of violence right here in Colombia, is not the same thing that we live in the '90s and the '80s. That maybe is the drug traffic, is the same problem, I think.

The drug traffic, the drug dealers and Mexico took the advantage of the peace process right here in Colombia, but then we continue this violence that in the cities we are not living as well. But in the next places that we have in their country, they are living. So it's very critical that they know and the president has the challenge to forbid and maybe stop this situation.

Peter McCormack: Yeah, so the constitution of Colombia is a single term presidency, right? There's no re-election, but you were in a period of conservatism and that's been successful economically for the country. As we know, especially in South America, there tends to always be a swing from right to left. I've noticed that there's tends to be a bigger gap between the rich and the poor in South America than say in Europe, and there tends to be a smaller middle class in South America. Are there any social issues at the moment? Is there any wealth inequality here in Colombia that is causing any level of protest and the level of social unrest? Is that happening?

Mauricio Tovar: Yeah, let's say that Colombia have been successful in the economic growth, but not in the inequality aspect of the economy, because for example in Colombia, the banks' growth are at 9.5%, something like that and the GDP grows 3%. So it's not that everybody's growing at 3%, is that some sectors of the economy are growing more and the other don't see any of that growth. So that's a very big problem and maybe because of that it's not from the past year, actually there is a long story on that situation.

Maybe for that very long situation, the past year started a protest here in Colombia because the people don't want that situation anymore, they want the change. They want to have more opportunities, they want to have access to the education, they want to have a better health system and the people is waiting for that and that's a big movement that it starts like two months ago. But it's not finished actually, it's a little stopped, but it is there.

Peter McCormack: It's there, so almost if we compare it to my experience in Santiago when I was with Guillermo, I'm so terrible in my pronunciations! Whilst the trigger in Santiago was the reason of the Metro ticket prices, there had been a lot of tension that had been building up for years. Are you saying that there's essentially some tension starting to build?

Alejandro Beltran: Yeah, but we are annoyed because a lot of things that are happening right here in Colombia, because the killing of our social leaders, maybe the access of education that Mauricio mentioned, we have a lot of inequality, if you see the wealth indicators, we are the second country of inequality in Latin America. The first, I think is Honduras or El Salvador, so there are many things that we are protesting and we are annoyed, we are angry, we are frustrated!

Peter McCormack: Is there much corruption?

Mauricio Tovar: A lot, around 5% of the GDP. The public GDP in Colombia is lost by corruption. It's maybe the most important problem of our country.

Peter McCormack: Okay, that's a very interesting point. I was in El Salvador, my previous visits to South America I went up to El Salvador afterwards and it was explained to me that the new president of El Salvador, his motto for his election was that, "we have enough money, we just need to stop stealing it from ourselves."

Mauricio Tovar: Yeah and if you ask me, Colombia is a rich country because we have everything. We have a lot of natural resources, we have a lot of young people, we have the all weathers in the same country, you can go to the snow in two hours and can go to the beach in two hours, you have all you need to have a very wealthy country. But unfortunately, the politicians are stealing our future by stealing the money of the public sector. So that's an important issue that we have to fight.

Peter McCormack: What is the status of education, the health system, and let's say also the social care for the retired? Because they tend to be three of the most important issues that people tend to focus on when they're frustrated with social programs.

Mauricio Tovar: The education system in the basic education, it's almost at 100% of coverage, it's a good percentage. The quality is another thing!

Peter McCormack: But everyone can go to school?

Mauricio Tovar: Almost everywhere.

Alejandro Beltran: About the public education, it's very hard that the people and the kids are accessing to a good education and a public education, but it's more private right here. You don't access like in Europe, it's happening that you have your high school or maybe your university are paying by the government, but is not the same thing we got right here. It's more like a private education.

Peter McCormack: So there is a public education system provided by the government, but the quality is questionable. The higher education university you have to pay yourself and if you want to go to a very good school, it's private and you have to pay.

Mauricio Tovar: Yeah and in higher education is not that easy to access, it's maybe 45 or 50% of have access, not only to the university also to technical programs and things like that. But we have a very big problem because there is a very big percentage of the people that starts the university and leaves the university.

Peter McCormack: Why is that happening?

Mauricio Tovar: Maybe, and I'm not an expert on education, I read something about it but maybe it's for the quality of basic education, they have a lack of some skills and the university's very hard, so that's maybe one problem. The second can be the economic situation of the students, sometimes they cannot eat or take a bath or something, that's maybe another situation. Maybe the third one is that in the private universities, it's very expensive to access to this kind of education. I don't know if you can add something?

Alejandro Beltran: Yeah it's cheaper to have higher education outside of Colombia than here because it's very expensive and the cities don't have all the infrastructure to give the education to students. As Mauricio mentioned, the public transport system, they don't have the coverage for many of the locations in Bogota, so it's very hard when you see people trying to get into TransMilenio, that's our public transport for free and then you are annoying because of it. But hey, I don't have opportunities for that and I need to transport. So I think there are many things to explain, what about the quality and the access of education. But I think the most important thing is about the quality.

Mauricio Tovar: But well, we have Universidad Nacional de Colombia, which is the most important universities in Colombia. They don't have the enough access for people, they don't have the coverage and so I think that's a problem because it's a very, very good university.

Peter McCormack: What about the health system? What is the state of the health system? Is there a public health system or is it entirely private there?

Alejandro Beltran: That is one of the things that people are frustrated, because the health system, it's very an equal. If you don't pay the health for yourself, you don't access to a hospital, maybe if you are dying. That is one of the biggest problems and the challenge that the government has because they say that they have the coverage but the people don't have the access. So that is one of the biggest problems that we have here, because they are privatizing the health system. So if you don't have money, you don't have access.

Mauricio Tovar: Yeah I have to say from my personal experience that it's a very bad experience actually, the public health system. Fortunately, I can pay my private health. But I think that maybe, and we come back to the main problem of Colombia, there is a lot of corruption in the system, in the delivery of drugs, in the payment between the institutions around health and the hospitals, there is a lot of problems with corruption and because the investment in budget is very high, but it's not efficient. So we lost a lot of money in that process.

Alejandro Beltran: Yeah in my experience comparing to Europe, I was in the hospital waiting for about eight hours that somebody attends me. In fact, I have a good health plan and I'm paying a good plan in my health system, but I don't have it. Comparing I was in Spain about two years ago and my daughter introduced a corn into her nose and then we had the problem, "hey, we need to go to the hospital," and 30 minutes we finished they attended with no documents and with no IDs.

They said, "hey, it's good" and then we go out. So good for Spanish health system and in comparing with Colombia, it's very, very different! So different in fact, there're people that are paying more, a high cost for health, is not that different with the people that don't access.

Peter McCormack: Okay and how much is health insurance here for high quality private insurance? For private health.

Alejandro Beltran: For example, I pay for me and for my mother $100 per month.

Peter McCormack: Okay, so do you know what the average wage is here?

Alejandro Beltran: Wage? Well, I don't know the average, it's maybe $800?

Mauricio Tovar: $900 yeah.

Alejandro Beltran: The minimum is $250 maybe.

Peter McCormack: So a person working in Colombia typically earns around 914,000 COP per month. What's that translate to? It's a mixed thing here, but that's a big chunk to take out.

Alejandro Beltran: Not all the people can pay that.

Peter McCormack: Okay, can you just update me on what the situation also is with FARC and the paramilitaries? Because my understanding was that there was a peace agreement?

Alejandro Beltran: Yeah.

Peter McCormack: But I went up to Cúcuta yesterday and the paramilitaries of running some of the trading routes into Venezuela. So the paramilitaries still exist, but that to me sounds a little bit more like a criminal organization, less so a ideological paramilitary organization. What is the situation there right now?

Alejandro Beltran: Well yeah, with FARC, we sign a peace agreement four years ago in 2016 and from that point, Colombia started the process to compensate big teams, to try to keep the public for the militaries to the songs that FARC control is in the past. It's not a perfect process, but I think that the past government has started up very good effort on that.

This one I have to say that they tried to continue, but it's not the same like the past one because the peace agreement is a different party opposition, but they're trying to continue the process. But there is some process with some problem, because some of the people that were in the guerilla in the process, leave the process and goes back to the jungle.

Peter McCormack: Is that because they're frustrated at the process or do you think it's a loss of identity that almost institutionalizes as a paramilitary group in the jungle, and they just don't want to leave it?

Mauricio Tovar: I only can see what the news show us, because it's different behind the scenes and there's a lot of information there that we don't know. But for me it's more that, they're scared that maybe the government is not going to respect the agreement, something like that. But as I said, we don't have the information A lot of things happening behind and we just see the news that, "100 people leaves the process," or things like that. But most of the people that were in the guerilla is still in the process, most of them.

Peter McCormack: All right, so the next area I just want to cover, because this is a good segue to get into Bitcoin is that, when I did an interview with two people when I was in Uruguay, they were from Argentina and they talked about the history of money in Argentina. I always pronounce this incorrectly, Corralito?

Alejandro Beltran: El Corralito.

Peter McCormack: And they say because of that, essentially they had no access to their money and the value of their money was wiped out, there was a very different understanding and opinion of money in Argentina. Therefore something like Bitcoin becomes very obvious, people just understand it. What is the history of money in Colombia? Has there been any periods of hyperinflation which has decimated people's income? What is the history here?

Alejandro Beltran: Well the history of money right here in Colombia is the private banks controlling the money in the century about 100 years, they are controlled by the private banks. Then when the countries were starting to control by the Central Banks with the government controls and then in the '90s and the 80s, we have a hyperinflation with two digits, it's more like 20% or 30% of inflation. But the Central Bank right here in Colombia, because of the constitution, they have to control the prices of the economy and in fact, we are the country that have controlled the prices of the economy.

We are in the 3% inflation comparing to other countries and you will see Venezuela is hyperinflation comparing. I think that the monetary policy of the Central Bank are doing very well that they don't have the tools to make more life quality to people. They are more focused on the monetary policy and then is not the biggest problem that we live right now. But I think the Central Bank are doing well and are doing its job. So I don't think that maybe there is the unique thing that they have there.

They have the controlling the international reservoirs, and they're all about the money. I think we are a small country and we don't have this great economy. Well we are actors in the Latin American context, but in the monetary policy, we are still a small country comparing with, well the US or maybe Mexico or maybe Brazil that are the biggest countries for comparing. They are controlling their system, but they don't have the...

Mauricio Tovar: I work in technology, I don't know a lot about economics. But I can say that when I was child, the highest money paper that I see in that moment was 500 pesos, it was the highest. Right now, there is just coin of 500, because the lowest paper of money that we have is 1000. So in 30 years, we have that situation and the volatility of the Colombian peso versus that dollar is very high. Two years ago we were like 2,800 and right now we are 3,400 or something like that.

Alejandro Beltran: Yeah, and the informal economy about the physical cash, from 9 to 10 people use cash for their transactions. The e-payments that we know, the electronic payments, debit or credit card, they use by less than 10% of the population. So this is one of the problems about the digital economy that people said because, "hey, you're using cash," and it's really, really easy to use cash for people and they trust about the cash and the informal economy is very big in Colombia.

Peter McCormack: All right, well let's get into the Bitcoin side of things then. Obviously...

Alejandro Beltran: But I have to say there is a lot of good things in Colombia that is maybe worth to explain because we are focusing on also maybe in the biggest problems. But I have to say that it's an incredible country to visit.

Peter McCormack: It is! Firstly, it is beautiful. This is my first time here and if I can say this without sounding disrespectful, the women are beautiful. I've traveled through South American and Latin American women are amazing, very strong women. I think my experience is very strong, very proud women, but they've beautiful hair. Everyone's so friendly too!

Alejandro Beltran: The people are too kind, we are good people, we are funny people, we always in fact, perhaps we have a lot of problems right here, but the people are going and moving on and then yeah, we have a lot of friends from different cities.

Mauricio Tovar: I have to say that they are not only beautiful, the woman here in Colombia, there's so intelligence and good leaders. The people that I most admire in my career are women. For example, the president of the National University of Colombia is an amazing woman.

Peter McCormack: They're a bit fiery, they're a bit passionate! I wouldn't want to get on the wrong side of a couple of the women I've met out here.

Alejandro Beltran: No, no, no, but we are Latinos!

Peter McCormack: Yeah, I know, but that's the thing. So I'd never been to Latin America until Uruguay back in December and I immediately had to come back, I wanted to see all of it! It's an incredible continent with an incredible history. But Colombia is phenomenal. You might not even know the reason I ended up here in Bogota? The reason I ended up in Bogota is I have a friend here and he's an ex-drug addict and he nearly died. So I came out to visit him and this is why I've ended up here and I'm going to be interviewing him later.

But he had been saying for a long time, "you've got to visit Colombia." He said to me that Colombia is the best country in Latin America! I know you're going to say that, but I will say that I think it's incredible. Look at the view we've got, people come see this because, we're in the centerk we've got a mountain behind us, it's sunny, it's beautiful and the coffee! Down in Cúcuta I had the best coffee I've had in my life!

Alejandro Beltran: Really?

Peter McCormack: Yeah, I didn't need sugar, I didn't need milk and they made me a coffee with a locally grown bean. So you've got the best coffee, you've got the best women, you've got amazing sunshine, what else do you need?

Mauricio Tovar: And we have a lot of very smart young people also and nice weather. We have this same weather the whole year and we can go to two different places, pretty cold and hot in two hours.

Peter McCormack: So you can ski or go to the beach?

Mauricio Tovar: No, we don't ski here. We have some ice and things like that, but we don't ski here. We have to go to other places, it's the only thing.

Peter McCormack: So that's a fair point. I'm doing a disservice asking about the problems, are there any other good things I've not talked about? Any other successes in Colombia? I haven't asked about that you want to talk about?

Mauricio Tovar: Yeah for example there is a lot of entrepreneurship right now. For example, Alejandro is the leader, the CEO of Buda, but there is a lot of movement and companies are starting to growth very heavily in Colombia. For example, we have an example of Rappi that is now like a FinTech app. But it starts on delivery of food and they have a lot of services and they have an investment of some SoftBank from $1 billion. There is a lot of examples that we can present on that way.

Alejandro Beltran: Yeah I think that Colombia has a great time to explore that entrepreneurship and the government and entrepreneurs are realizing that it's one of the things that maybe we have the, this bet for grow the community. So in the example of Rappi, that is our biggest unicorn, our first unicorn right here in Colombia. We are so proud of it, but we have a lot of challenge to make this happen!

Peter McCormack: But you can build on this?

Alejandro Beltran: Yeah, I think there is a lot of opportunities a right here in Colombia because it's everything to build a right here. In the case of technology, we have a lot of opportunities for developers and people that are growing their community, are more curious about how to use the technologies for decentralized many things and not only in the economy, but the social things. They are doing very, very well.

Mauricio Tovar: Yeah, also the nature in Colombia, it's amazing. For people that they love to visit amazing places, we have a lot of them in the beach, in the in the coast and in the jungle. Also, we have for example the coffee area that the people is amazing, in Bogota you have a culture of amazing and also a gastronomic offer, very good restaurants.

Peter McCormack: The food here is unbelievable. So well, I've eaten here both nights because it was so good.

Alejandro Beltran: Yeah, you find out a lot of experience right here in Colombia because you have beach, you have the mountains, you have cold places and warm places and hot places. So you find everything right here in Colombia. So it's very good to see that the foreigners and all the tourist people are very interesting in Colombia and see what's happening and fun.

Mauricio Tovar: And the people is very happy. You can talk with anyone and the people is very warm and wants to know you. It's a good feeling, that the Colombia people have a good feelings with foreign people and between us also. So it's a good place to visit.

Peter McCormack: How's the football team? How's the national football team doing?

Mauricio Tovar: No, no, no, I don't want to talk about that!

Alejandro Beltran: It's not bad.

Mauricio Tovar: The 23 Colombian team, I don't know what to explain it, but the young people of the national team are doing so bad, but we need to improve.

Peter McCormack: I remember two games where England played Colombia. I remember once in a world cup, I think we won two nil, Beckham scored a free kick. But the game I remember most is... Do you remember the game where your goalie did the scorpion?

Alejandro Beltran: Yeah Higuita! He's a crazy man.

Mauricio Tovar: It's a historical moment, right?

Peter McCormack: It is! It's an absolutely one of the most historical moments in football, but a risky thing to do. I bet if you'd got it wrong, he would have looked like a fool. I loved it, it's an iconic moment in football history.

Alejandro Beltran: Yeah, I remember the world cup in France and he England and Colombia that we lost two-zero because of David Beckham.

Peter McCormack: Yeah, it was a great free kick!

Mauricio Tovar: Yeah, but I hate Mondragon at this time.

Alejandro Beltran: Yeah, but that is a Colombian people, he's a risky guy. There is a sentence that you use in Colombia that, the risk that you have come into Colombia is that you want to stay.

Peter McCormack: Oh I don't want to go! I say that is because I'm off to Venezuela later today and I desperately want to go for the food and the experience and I've got to say, my experience, going down to Cúcuta and we're going to get into this and meeting the people of people from Venezuela, they felt very similar to the Colombians. They were also very friendly, they were very hospitable, they wanted to tell this story and you could tell... We have this term, we say that they have a weathered face, they've been through a lot.

Again, I was told to be careful, but I didn't feel unsafe at any point. I felt this is a group of people who are trying to do the job that the government should be doing for Venezuela. They were coming to earn money and get food and bring things back. So I do want to go to Venezuela as well, but I also don't want to leave.

Alejandro Beltran: We are the same with Venezuelan people. Colombia and Venezuela are very similar.

Mauricio Tovar: I know a lot of people from Venezuela since the people stay right here in Colombia. So they are very nice people, they are very warm, they are very similar to us, so we share a lot of things. Maybe you tasted the arepas, the Venezuelan pabellon?

Peter McCormack: Oh and Reina Pepiada, what was it called?

Mauricio Tovar: Reina Pepaida!

Peter McCormack: That was the cheese!

Alejandro Beltran: It's amazing! We have something very similar. We have the arepas but a different toppings and ways.

Mauricio Tovar: The biggest fight that we have with the Venezuelans is who do the better Arepas? It's one of the challenges.

Peter McCormack: Well, the Venezuelan I had yesterday was pretty good! I had one in El Salvador as well but it's called a Pupusas or something?

Mauricio Tovar: Never been there.

Peter McCormack: And that was also very good. But we will see. I'm looking forward to that experience but we should talk a little bit about Bitcoin and I know specifically Alejandro you have, working for Buda, Guillermo explained to me the experience they had with the banks, both in Santiago and here in Colombia and the experience was about 18 months you were...

Alejandro Beltran: Yeah, about a year, we closed the operation right here in Colombia trying to clarify with the financial authorities.

Peter McCormack: And I should just let people know, so my interview with Guillermo is not going to be coming out until around, I think it's going to be towards the end of February, so people should know I did that first. So Buda is the exchange which I covered in Santiago, but we've got to hold that back for a certain reason. So we're doing this one first, but you worked for the same exchange. Are you a partner? Were you one of the founders?

Alejandro Beltran: In Colombia? Right here in Colombia, we have a partnership with the Guillermo and all the partners in Chile. So with my partner, we founded right here Buda in Colombia and we started communicated with people, with public institutions about our operation is forbidden or they allow us. No, we don't have the blessing, about the government, they say, "there is no restriction, it's not about us. We don't have the situation."

But in 2017 that when Bitcoin grows up a lot and they paid attention about what was happening and they communicate with the document that the financial institutions are not allowed to use cryptocurrencies or develop cryptocurrency services right here in Colombia. So the banks understood that it includes all the crypto services that is not a financial institution. So they close our accounts and then we need to clarify it with legal actions. We sued a financial authority and then they started conversations with them and then we finally opened at the middle in the last year.

Peter McCormack: So what is the current state? Bitcoin is now legal to trade, mine, spend?

Alejandro Beltran: Bitcoin is not regulated. It is not an illegal thing because you don't have the regulation, but it's not forbidden.

Peter McCormack: Oh, so there's no regulations around it.

Alejandro Beltran: Yeah, there're no regulation and so it's legal. We don't have a policy or a public policy that forbid that. But the banks are very conservative in the moment that, you open a banking account, because we believing for many criminal activities and they think that there is a relationship between Bitcoin and these criminal activities. In fact, Ponzi schemes right here in Colombia are very useful to rob people.

But actually, we are working with financial institutions, trying to educate people to see that Bitcoin is not the bad thing and that humans are the bad things. So I guess Bitcoin they are working. In fact, one of the biggest banks in Colombia are working with the blockchain of Bitcoin doing some experimental things. So we are in the same side. We are on the dark side, but...

Mauricio Tovar: Many people can use it for the citizens. They have no problem to use it, it's only for the financial system, there is some, it's not any specific restriction, it's a letter that the regulators send to the banks saying that they recommend not to use any of these cryptos or something. But it has some consequences in the sector because if the bank says that a public institution is saying that a regulators...

So the other public institution say, "I cannot say it's something different than the regulator," so it's more done for the financial sector in the practice. But there is no law that said you cannot use it or something. The Congress are working on a project law to try to promote the regulation on exchanges or cryptocurrency operators right here in Colombia. But it's only the beginning of...

Alejandro Beltran: Actually, the Congressman that promotes that project of law that is his name is Mauricio Toro.

Peter McCormack: Good name!

Mauricio Tovar: Yeah, it's a good name, very similar to mine! He's a very young Congressman and he opened the possibility to the people that wants to vote for him in the campaign to give him a Bitcoin.

Peter McCormack: Oh that's right, financed with Bitcoin, interesting.

Alejandro Beltran: We worked with them in the campaign, so it works a little bit. But they show that work at that Bitcoin works for that. He said that we're trying to replay the experience of a Congressman in the US that they finance their campaign with Bitcoin.

Peter McCormack: Is Bitcoin taxed here?

Alejandro Beltran: No, there are documents and pronouncement about what is taxed.

Peter McCormack: It's getting nearer, isn't it?

Alejandro Beltran: Exactly! It's an industry that I work in.

Peter McCormack: Yeah, we'll cope. People have to put up with a bit of digging in the background.

Alejandro Beltran: But about the tax situation, we don't have the announcement of the tax authority right here. They say that, you need to be careful when you started buying it and then you tax it. But there are a lot of things to tax the Bitcoins. We don't have this one thing that maybe say, "hey, you need to tax Bitcoin like this."

Peter McCormack: What has adoption been like for a Bitcoin here in Colombia? Is there is a widespread adoption or is it still early? How are you doing?

Mauricio Tovar: Is not easy to know but if you see the statistics on LocalBitcoins in Colombia normally is this six or seventh country in the world with most volume in trading on LocalBitcoins. Maybe the reason can be, first of all because we are very close to Venezuela, Venezuela is normally the second country with biggest volume in LocalBitcoins and most of the Venezuelans that are living in Venezuela come to Colombia, and when they're here and have some job and they want to send some money, they use Bitcoin.

They use another alternative also, but they also use a lot of Bitcoin. The second that I can say, that people is trying to find options because the financial sector in Colombia not a good experience like in the States or Europe, that you have a very good experience with the financial sector. In Colombia, it's not a good one and I think that the people is trying to find options on that. The third one maybe is that, and I have to say that maybe there is some movement between people, between cross border payments, but also some of them is from money laundering and things like that.

Alejandro Beltran: Yeah, I think one of the asterixis that we have in Buda is more like a speculation and more like an investment options, that we have an alternative to options for a traditional stock markets. So is one of the main thing that people invest in Bitcoin. But one thing additionally, as Mauricio mentioned about the cross border payments between Venezuela because they have a lot of restriction in the currency exchanges, so it is one of the biggest thing. That's why because Venezuela and Colombia has the most trading volume in LocalBitcoins and in fact, when you check the wallets and other things, you see more volume that is not only the LocalBitcoins shows.

Peter McCormack: So we'll talk about that because that's going to be my next destination. So just before we do that, just a final question on Bitcoin here in Colombia, are there any unique challenges that you are having here with regards to Bitcoin that anyone should be aware of, or your challenges with Bitcoin universal?

Alejandro Beltran: Well I think that one of the challenge to get this adoption of Bitcoin, it's more like a cultural thing. We are living most of the biggest fraud about the criminal activities, so people thinks that Bitcoin are promoting that. That is very, very wrong thoughts about what we're doing.

Peter McCormack: But specifically, is Bitcoin here tied to the drug trade at all?

Alejandro Beltran: Well the financial authorities said that Bitcoin are using for that, but people are afraid because the financial authority said and when you see the financial authority saying, "hey now just be careful with Bitcoin because they are using for criminal organizations to deal with drugs."

Peter McCormack: Is that generic or they talking specifically about the cartels using Bitcoin?

Alejandro Beltran: I don't know if the cartel are using it because if you see the digital traceability that Bitcoin has, I prefer to get my submarines and using the physical cash to do. I don't think that are using it, but maybe when you see a lot of phishing and the hacking and the ransom wars and all this stuff, and the digital technology, you see the organizations, the police and all the international organization saying, "hey just be careful with Bitcoin because they are paying the rescue of information on Bitcoins," and all the stuffs. But it's more about the wrong thing that the financial authority and a few public institutions are thinking about Bitcoin and their technology, but because they said, "hey blockchain yes, but Bitcoin no." I don't like that.

Peter McCormack: That whole bullshit saying, yeah.

Alejandro Beltran: Yes, so I think it's a wrong way to treat the technology because Bitcoin is actually a technology and it doesn't consider that. I think it's more about the culture that we have, the relationship between the money and the criminal things. So the money when you use the peso colombiano and the dollar, you say the same thing, but Bitcoin is one of them.

Mauricio Tovar: Yeah, and I think if you spend three months using Bitcoin, you can see that it's not a good idea to do that things with Bitcoin because the traceability of Bitcoin. If you send the Bitcoin or those guys send Bitcoin to three person and those goes to exchanges and they use the ID, they can know who you are with artificial intelligence or something like that, so it's not a good idea. If you know a little bit about the technical part, you can see that, but it's a narrative that they want to send to the public that Bitcoin is just for this and for dark web up and money laundering and things like that.

But I think that one big challenge that we have here, and it's different from other countries, is that, I don't know if it's for our history with drugs and things like that, but we have a lot of ponzi schemes here. It's like a cancer, I don't know! You create a Ponzi scheme with Mandalas, one of the ponzi schemes that restrict the financial authority was with Mandalas and so you see that is ridiculous how people convince other people to invest in that kind of thing.

Unfortunately, them using the name of Bitcoin for that in the past they use that kind of things, but right now they're using, in the past year, they're using the Bitcoin name. Maybe I can understand the authorities on that part because a lot of people lose their money and they goes to their regulator and say, "okay, I want my money back." "Where's your money?" "No, in Bitcoin." "Where is your Bitcoin?" "No, this company?" "But that is a Ponzi scheme." That is very tough for them.

Alejandro Beltran: But I think we are showing that we can be self-regulated and we are trying to the government and the public institutions that our self-regulation, it's good for people. But maybe we build that trust with people, we are in four years in the market and we are trying to get that trust with people in their financial institution. But well, there are many thoughts about that.

Peter McCormack: So your main job here really, one of your primary jobs here is... Well there's two, there's education, but you also have to do a bit of a PR job, a public relations job for Bitcoin because of the misinformation.

Alejandro Beltran: Yeah and my experience when we try to educate people and we have a lot of events in the year, trying to promote a responsible use of the technology, many people said, "hey why do you speak a lot of about Bitcoin and we are focused on blockchain." You need to understand Bitcoin to use the technology is the first step, and is the real case that we using with in real life in the world.

So you need to understand Bitcoin, before to know that the blockchain technology. So it's one of the biggest challenge that we have for people that create this central things about the regulation, about what the financial system works. So yeah, I would say first you need to learn more about Bitcoin and then you can use the technology as you want, but you need to learn that.

Mauricio Tovar: And from the technology perspective and in the market perspective is important because if you say "Bitcoin no, blockchain, yes" and then, when you have another use case that decentralize some other authority or company, they're going to say no. So it starts with "Bitcoin no, blockchain, yes", but when you have another alternative or another option, they will say again no.

So it's very important to open the market in this time, it thinking about the future and maybe that is why it's very important this project of the Congressman, because people is going to the black markets, because they want they want Bitcoin, they want crypto and they're going to to places that are not regulated and with this law, the exchanges have to accomplish some requirements that protects the users to buy in a safe places. So that's why it's very important for the system.

Alejandro Beltran: The president of our FinTech technology association here in Colombia said that it's more about what we grew up thinking that regulation is the safest thing to promote a technology or maybe an idea. So we grew up with the Spanish culture about the regulation is great, it's different between other countries when you say that the regulation is very restrictive and they don't have open the technology, because the law is lower than technology.

So in Colombia we think that if it's not regulated, it is banned. That is one of the things that we are maybe thinking. In fact, we have the case of Uber. Uber goes out Colombia because they don't have the regulation and they don't have the conditions to establish right here in Colombia and in a judge decision that makes you are forbid and right here in Colombia. It's one of the problems that we have, is not regulated, it's banned. That's one of the of the thoughts.

Peter McCormack: By the way, Bitcoin just went over 10k while we were doing this interview here, that's good! So one of the things I can't end this interview without talking about is Venezuela. I think people in the, let's say broadly crypto not just Bitcoin, have a habit of looking at Venezuela as a great use case for Bitcoin. I know people who are looking a bit closer on what the reality is. Alejandro Machado...

Alejandro Beltran: Alejandro Machado.

Peter McCormack: Machado! I've got every pronunciation wrong in this interview and I've been calling him Machado since my first interview. Anyway, so Alejandro was my introduction to Venezuela, my first interview over a year ago and I've done a couple more and I noticed there's been some closer studies, there are other projects that are like Dash is often talking about in Venezuela, but I wanted to really understand the reality and cut through the bullshit.

I think there is a lot of bullshit, and I went to a Cúcuta yesterday, the border crossing to Venezuela, incredible experience for a number of reasons which I will cover in future, but just as a starting point Mauricio, because I think we should just try and allow people to understand how desperate the situation is inside Venezuela and then what exactly is happening on the border. Also add into that, most of the other borders have all been closed, this one remains open. Colombia has been very welcoming, very supportive of the people of Venezuela and essentially have become a lifeline.

I understand there was a history there in that where there was a time when there were Colombians going to Venezuela, because Venezuela was the richest country and Colombia had its own problems, so there is this brotherhood relationship between the two countries. But can you just explain to people what is really going on in Venezuela and then talk about what's happening on the border?

Mauricio Tovar: Yeah, the history is that the economy in Venezuela 20 or 30 years ago was so good and in Colombian, not that good, so a lot of Colombians went there. I think that almost 30 million Colombian people went to Venezuela. That's why we have a very strong relationship between the two countries. We are very near also that, but that's one of the reasons and a lot of those Colombia's are still there, a lot of them. Some of them come back and I agree that it's a lot of hype regarding what is happening about Bitcoin and crypto in Venezuela that they're using a lot. They are using for a certain value, a store of value to solve the problem of hyperinflation, but they're also using a lot of US dollars.

Peter McCormack: Yep!

Mauricio Tovar: Actually, in Caracas they use dollar than Bitcoin right now. It's a dollar economy right now what Alejandro explained because he was there very recently and there is another projects of cryptocurrencies that say, "no, Venezuela is the place. Venezuela it's happening a lot." But for example, the past week we want to know about projects that are in Venezuela, developers that are working in Venezuela, in Bitcoin and blockchain and was very difficult to find people work in very, very heavily.

But in the other hand, I heard about these stories of friends of mine that have companies and that hire developers in Venezuela and they have a problem because they pay with Bitcoin to the developers, as they have the enough money to leave the country and they leave. So the people that are accumulating Bitcoin are leaving Venezuela. Maybe they're the people that are saving Bitcoin are leaving Venezuela, so maybe that's another reason why there is no full trade of Bitcoin in Venezuela, because when you have enough money you can go out of Venezuela.

Peter McCormack: You can escape?

Mauricio Tovar: Yeah, you can escape.

Peter McCormack: And I know there are people there because I've spoken to them and I'm going to be meeting some of them. My experience yesterday, I went with two goals. I obviously have a Bitcoin podcast and I want to find out what's happening there and what the truth is. I don't know if you know, I also have another podcast called Defiance, which is more about activism and political issues and things. So I also just had a general human interest in what's really happening for the people there. My perspective is that, it's not that people want Bitcoin, people want food medicine and basic amenities.

Mauricio Tovar: Yeah, it's not about the opportunity, is all about the needs that the Venezuelan people need right now.

Peter McCormack: Yeah and they are very basic needs!

Mauricio Tovar: It's very basic needs. When you see about 30 years ago, Venezuela was the most powerful country in Latin America because of the oil and the petroleum and all the stuffs. But when you see people right now, trying to get the opportunity, you don't see the opportunity on the technology because you see, "hey, Bitcoin is revolutionary, yeah I want to invest.

No, they have some needs that you provided and one of the cases that are working in the observatories and all the centres that are investigating the Venezuelan situations, they say that Bitcoin works for these refugees right here in Colombia and other countries in Latin America, that they are sending money to their families and that Bitcoin is the greatest discovery in the country. So you see the situation that, you print the money and you use it for origami and other things. You say, "hey, there is a lot of problems that maybe Bitcoin help people."

Peter McCormack: I saw a lot yesterday in Cúcuta but strangely the thing that caught my eye the most has stuck with me, because I'd heard about this was one lady. She had a joint bag of toilet paper, carrying bag, because I'd heard that access to even the basics such as toilet paper is very difficult. But I saw all different things people talk about food and cigarettes and medicine, everything. But that one stood out to me, because that's quite a journey to go just to... You and I, we just go to a local store, right?

But she's having to cross the border to go across to buy this. So I think what people need to understand is that there are these absolute basic needs, the economy has essentially died in significant parts of Venezuela. I know it's building up again in Caracas and Maduro has started to change his policies to build the economy up and I know that's happening, but there are these absolute basic needs people have.

There are also people who can't work or there is no work and there are also people who are just hungry, very hungry and I'll tell part of a story of somebody I met. I won't tell all of it, but I went to one of the NGOs to interview the director and I mentioned this to you, but there's a young man in there with his wife and their baby and the baby was less than a year old. He'd left his three children in Venezuela and he'd come to try and get a job to earn money, to send food back to his parents and his children.

Himself, his wife and his child had been, he hadn't been able to find a job, and they'd been living on the street for a week, no cover. They were explaining to me that, every night they're having to even hold everything tight, because people might even try and steal their clothes. He said he was almost sleeping with one eye open. But one of the things that really powerful about his experience when he was explaining and a lot of people is that, these people aren't just coming into Cúcuta to earn money to feed themselves. So actually, everyone's trying to also own money to send things back. The economy at Cúcuta is actually providing resources back into these border towns. Is that a fair observation?

Mauricio Tovar: Well I think it's a fair observation about what was happening in the border. But when you see that there are many things that are happening inside Colombia and the centre in Colombia and not only the border that are happening at the same thing, is not only about the border. When you see cities like Bucaramanga, Bogota and cities close to there, you see that many people are earning money and trying to send money to their families, and they have all difficulties that poor people has. We don't have, as a Colombian, we don't have all the conditions to attend all the people that are immigrating to Venezuela. It's a sad thing because we want to help people, but there's a lot of people migrating to Colombia.

Peter McCormack: Millions, we're talking in millions!

Mauricio Tovar: We spoke about 1 or 2 million Venezuela people in Colombia.

Alejandro Beltran: In Colombia, but in the rest of the world, 4 million.

Mauricio Tovar: I don't know when you stayed in Chile, but Chile is about 500,000 people living in Chile. They migrate across the country, across the continent and it's very, very sad to see that.

Peter McCormack: Yeah and interestingly on my flight on the way over, I was chatting to a lady from Colombia and she said, "look, we want to help the people of Venezuela, but there's been so many and what's happening is they're taking the jobs and they're are willing to work for half the price and that's a lot of money. Someone can come and work and even $200, but that's a lot of money in Venezuela." I'm just taking it full circle back to the Bitcoin thing because the thing we want to understand is that, the real use case, which again is limited.

What was explained to me is that a lot of people in Venezuela can't get bank accounts, they don't have the ID or they don't have the money. So it has become a way of people coming into Colombia, earning money, buying Bitcoin, they're using it for remittance to send money back to their family, who then sell it that side to be able to buy food and things that. That's the real use case.

Mauricio Tovar: I think that Bitcoin is very powerful on that, because so many countries wants to send, for example, help due to the Venezuelan people, and Maduro can stop that help. But with Bitcoin he cannot do anything, it's a real way to help. If the other governments want to help the Venezuelan people, they will try to open the opportunity to Bitcoin because Maduro cannot do anything. But there is a problem is that not all of the Venezuelan people have a smartphone, they're sharing the smartphones.

Peter McCormack: Yeah I noticed that or they don't have data.

Mauricio Tovar: Yeah and not only for financial things, also for example, for message or WhatsApp, they're sharing between neighbours the smartphone, because not all of them have access to this technology because it's very expensive for them. They prefer to have money to eat or the basic things than for a smartphone. But normally they have a friend that help them to use or send some message or use Bitcoin or something like that.

Alejandro Beltran: Yeah, I think it's the magic of Bitcoin. When you having trouble with your country and all of the things that are happening in the emerging markets, in Africa and South America and Latin America, you see that Bitcoin works because it's very, very helpful for people when you transfer money, as easy as when you say an email. So I think, it's one of the real use cases what's happening between Venezuela and Colombia.

Peter McCormack: But this is why it's useful doing this traveling around the world and meeting people and understanding the different local challenges, because like I said, the use case of Bitcoin for somebody who's living in New York or London is very different from somebody who in Cúcuta, right? As you said, they might not have a phone. If they've got a phone, they might not have data. So is there a requirement for mesh networks? If the people are using Bitcoin, they probably don't give too much of a fuck about long-term savings, is that they just want to get some Bitcoin, they want to be able to send it to their family home and their family want to be able to sell it and they want to be able to buy food.

So I would say for me, Bitcoin is a speculative tool on the future growth. For these people, it's a tool of survival. It's a genuine tool of survival outside of, let's say the more wealthy Venezuelans who are developers and coders who can then... We're talking about the border town, we're talking about Bitcoin as a tool of survival. Therefore, what are the things that need to be built? What is the infrastructure that's needed that can help these people with these absolute basic needs of getting money from point A to point B? How do they get it? How do they transfer it? How do they sell it? And that's a very different experience I see from successful Western nations, right?

Alejandro Beltran: Yeah, that's true!

Mauricio Tovar: Yeah, maybe in Argentina they are using Bitcoin as a store of value because they are not so bad like in Venezuela, but they have this hyperinflation problem also.

Peter McCormack: And a massive distrust of the banks and the government.

Mauricio Tovar: I know that because my brother lives there from the past 13 years and he's living all of these cycles of the economy in Argentina and it's very painful every time the Argentinian pesos goes down like 35% in 20 hours or something. It's very painful, not only for him, but also for the relatives here in Colombia and other countries.

I think that Argentina people are very strong on that because they have a very big history and maybe that's why the Bitcoin and crypto companies in Argentina is strong because they find this option very early, earlier than us, because we don't have the need or we didn't have that need eight years ago as they have it and they are building on that. So I think that in Argentina it's more for a store of value than for basic things or living, but in Venezuela, I agree with you that it's more for the day to day living thing to them.

Peter McCormack: I think one of the things I've noticed, if people want to help, there are NGOs operating in Cúcuta, they're providing education, they're providing meals. When I say education, they provide an education to the children who aren't in school right now, so they're providing that, but they're also providing a Bitcoin education.

The best thing you can do is just make some donation and interestingly, $100 of Bitcoin in Cúcuta goes a long way, it goes a very long way! You were saying to me, like I mentioned, I gave a bit of money to somebody and a small amount of money can go a long way in Venezuela. Just so people get some perspective, let's say $20. How much money is $20 to somebody living in Venezuela?

Mauricio Tovar: Plenty of dollars in Venezuela money it's a lot. It's maybe enough to live one month, I think.

Peter McCormack: For a family?

Alejandro Beltran: A family lives with $20 in Venezuela. That's why the problem of hyperinflation, the last cost of money produced on the decisions that Venezuela does. In fact, when you see $20 right here in Colombia, it's not enough money to buy something to live one month. In a day, you spend that money. When you see in Venezuela, you can live for three months or five months on that. So I think when you see that difference between the money value in the different countries, you see that Venezuela is very troubled right here.

Peter McCormack: Well, I'm looking forward to going, I go later today. Hopefully I'll get through immigration without any problems. It will be an interesting experience and I want to find out the reality of what life is like there. So yeah, that'll be interesting. But listen, we've done 1 hour and 25 minutes.

Usually I want an hour, but a fascinating interview! Great to meet you both, I consider you friends now. I hope to come back, I really have enjoyed my time here. I thank you for your hospitality and if I can ever do anything for you guys, you just reach out, you let me know. But if people want to get in touch with you and want to speak to you, do you want to tell them how they can get a hold of you? I'll let you go first this time Alejandro, because Mauricio went first last time.

Alejandro Beltran: No, thank you Peter for having us. It was a great time to see that in Colombia Bitcoin is happening and it's very, very great to have you here and check what's happening and well, good luck in Venezuela, because there will be a very, very interesting experience. So if people want to communicate, I'm from buda.com. My Twitter is @abeltran83

Peter McCormack: Okay, I'll put that in the show notes.

Alejandro Beltran: Thank you Mauro for inviting me to as well. So, thank you!

Peter McCormack: Mauro?

Mauricio Tovar: Thank you very much for visiting us. This is your home and for all your listeners.

Peter McCormack: Thank you!

Mauricio Tovar: Yeah, Colombia is a great place to visit, so we're very happy to have you here and thank you for sharing with all your listeners what you saw in Venezuela, what you are hearing in Colombia. It's very important to people to know the real things that are happening and my Twitter account is @maurotov and I'm on LinkedIn.

If you love pictures, I have not crypto pictures, is landscape and things like that. I have an Instagram account that it's also "Maurotov". It's just for pictures. We also have account of Blockchain Colombia in Twitter, you can find us on Facebook, everything. We have a meetup with more than 2000 of people there. So yeah, if you come to Colombia, you can contact us and we are very happy to talk.

Alejandro Beltran: Yeah, please let us know when you come back to Colombia and invite you some beers!

Peter McCormack: Okay, well listen all the best. Thank you again and yeah, I hope people listen to this and I hope they come visit Colombia, because it is a beautiful country, amazing people and yeah, all the best guys!

Mauricio Tovar: Thank you very much Peter!

Alejandro Beltran: Thank you!