Latin American banks can now use crypto for cross-border payments

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Bantotal, a bank technology provider that services financial institutions across Latin America, is giving banks an easier option to facilitate cross-border payments, and that solution is coming through the power of blockchains. The company has partnered with cryptocurrency exchange Bitex to speed up financial transactions, and will reportedly now be able to provide the platform to more than 60 banks throughout the LATAM region. 

Bantotal is based in Uruguay and has around 20 million customers making use of its money-management offerings in 14 LATAM countries, making the integration of a blockchain-based solution a major step forward for the Bitcoin ecosystem. The company’s chief marketing officer, Manuel Beaudroit, explains, “The integration of Bitex into Bantotal program represents a major step in the breakthrough of blockchain technology in banking.”

The executive adds that it is a “quantum leap” forward for regional financial institutions. The fact that a blockchain-based payments solution is typically five times cheaper than traditional cross-border transaction solutions, coupled with blockchain’s ability to settle transactions much faster, is going to help the entire LATAM population. 

Bitex has already helped LATAM banks improve the customer experience. It has worked with banks in Paraguay and Argentina launch a pilot program that saw payments reach their destination in an hour as opposed to the one month previously seen. 

Bitex allows banks to receive fiat from customers, convert it to crypto and then back to fiat by the receiving bank. Beaudroit states, “If I want to make a payment from Argentina to Chile, I don’t need to buy dollars with the Argentinian pesos then transfer the dollars to the U.S. then move the dollars to Chile and exchange them into Chilean pesos. I can just send a payment from Argentina to Chile directly [using bitcoin].”

There are still major hurdles that have to be jumped before widespread adoption can take place. Most notably, as is the case around the world, adherence to international anti-money-laundering and know-your-customer policies associated with the blockchain have to be addressed. Since the Financial Action Task Force (FATF) has already begun to address this issue, and G20 countries have agreed to accept the FATF’s policies, it won’t be long before LATAM financial institutions embrace the new partnership.