A piece of news published on January 30, 2023, updates a topic that I have been talking about for a long time: the greater acceptance of Cryptocurrencies in the world, and in this case, in the countries of the region.

The Coindesk portal post I’m referring to (https://www.coindesk.com/business/2023/01/30/binance-partners-with-mastercard-to-launch-prepaid-crypto-card-in-brazil/?utm_source=tldrnewsletter), mentions that Binance and Mastercard have partnered, to start issuing a prepaid consumer card, which consumers in Brazil can use, and will allow them to make payments and transactions, using their assets in 13 cryptocurrencies, including bitcoin, ether and Binance USD.

The issuance of prepaid cards in cryptocurrencies is not a novelty. In Argentina, the first country in Latin America in which this tool was put into operation, in August 2022, Binance and Mastercard also carried out a similar launch. In addition, there are the experiences of LemonCash, Buenbit and Belo. These cards, from the moment they began to be used, pay between 2% and 21% reimbursement on the payments and transactions made with them, a condition that generates a significant incentive for the use of these payment instruments. (https://www.coindesk.com/business/2022/08/04/binance-joins-argentinas-crypto-prepaid-cards-boom/).

In the European Economic Area, an offer similar to the one we mentioned was launched in August 2020.

Therefore, the launch reported by the news from days ago is not new. What is relevant is that in Brazil, 49% of local consumers acknowledge having made at least one transaction with cryptocurrencies in the last 12 months, compared to 41% of the world average.

A quick reading of this fact makes me conclude that with consumers with a propensity to use cryptocurrencies greater than the world average, in a market the size of Brazil, and the boost that a prepaid card like Mastercard with a wide penetration in the socioeconomic level of medium and low consumption, the use and therefore the acceptance of cryptocurrencies as a means of payment and as a store of value, will surely experience a significant boost.

Before moving forward with the central theme of this release, cryptocurrencies, I think it is important to remember some minor concepts of the tool used for payment, which is associated in this project with cryptocurrencies: credit cards and purchase cards. «prepaid».

The credit card, as we know it today, was born in 1950, in New York, invented by Mr. Frank McNamara and Mr. Ralph Schneider, to be able to eat in 28 restaurants and stay in 2 hotels belonging to the Diners Club system. But there are previous precedents in the United States, when Western Union, in 1914, granted a line of credit free of charge to selected clients, so that they carry out transactions in its offices and it delivered them free of charge, a cardboard card for their identification and credit control. granted, which was an individual line, without financial cost, for each chosen client. In these cases, the trust that the client deserved, facilitated their access to consumer credit.

«Purchase cards» are an evolution of credit cards, which allow those who do not have money with them at the time they wish to carry out the transaction (factual restriction), nor are they deserving of commercial or bank credit (financial restriction).

Purchase (or prepaid) cards, with great penetration in Uruguay (see the successful cases of «MI DINERO» -https://www.midinero.com.uy-, and «PREX» -https://www.prexcard .com/-), are already installed in this market, just as “Tarjeta Naranja” was consolidated in Argentina years ago, and recently “MercadoPago”.

As a reversal of history, in the case of PREX Uruguay, the purchase card itself, which operates with funds deposited by its owner, after analyzing the user’s consumption profile, at his request, can grant him a credit quota for consumption. In essence, if the consumer and user of PREX deserves trust, they can be financed for their consumption..

And as an innovation for the Uruguayan market, PREX allows you to buy, sell, hoard and make transactions using nine cryptocurrencies. Therefore, as we said, the proposal we are discussing from Brazil is not innovative; but if its possible impact on the demand, hoarding and use as a payment instrument in the region, of these crypto assets.

There is a manifest greater acceptance, in ordinary life, of various cryptocurrencies.

Thus, beyond the break in the euphoric trends that caused the collapse of FTX in 2022 and the abrupt loss of assets experienced by Binance at the beginning of 2023 (https://www.ambito.com/finanzas/binance/crisis-los -last-70-days-lost-us12000-millions-assets-n5626511), cryptocurrencies are experiencing a consolidation in their demand and use. Even the acceptance by some provincial government, in Argentina, as a payment instrument for the cancellation of tax obligations, strengthens this trend (https://www.infobae.com/economia/2022/08/26/mendoza-incorporao -the-use-of-cryptocurrencies-as-a-method-of-payment-of-taxes/).

In conclusion, I understand that in 2023, in the Region, the use of cryptocurrencies will be promoted, due to different factors, among which I mention local exchange restrictions, the volatility of some currencies, and the lack of accessible credit for consumption and for the investment.

Therefore, if the use of cryptocurrencies as a means of payment and as a store of value increases, the next step will be its use as a unit of account and the consequent business budgeting for this type of asset. This will not happen in the short term; but it is surely the future to come.

It is of course pending at this stage, the formalization of markets that generate greater certainty and less price volatility for each of the cryptocurrencies.

According to my deep liberal conviction, I am not in favor of regulations. But in this case, the total lack of rules means that there are no markets in the medium and long term that generate confidence for genuine investment. For this reason, without advocating extreme regulations that take away the initiative from private agents, I understand that the next step, for the consolidation of cryptocurrencies, is to adapt the good existing rules that enhance the laws of the market, or to sanction a few others and good, to formalize a market that little by little ceases to be informal and merely speculative.

Progress is being made in a good direction towards the more widespread use of cryptocurrencies. The impact that the product offered by Binance and MasterCard will produce in Brazil will surely give a boost in this regard. I understand that we cannot stay behind the facts or deal with Manichean principles: even those who love freedom and the free play of market forces in dynamic economies know that there must be few clear rules of the game for economic agents to, assuming risks, generate legitimate profits and that they are protected.

Progress, innovation and productive activity require a reliable economic ecosystem. If the trend towards greater use of cryptocurrencies is not accompanied by the creation or adaptation of clear rules of the game, there is a risk that, in the face of a run, a bankruptcy (for example, the fall of the FTX) or a crisis in the sector, typical of the business risk and the different trends of any market, the negative effects of these are associated with defects or shortcomings of the tradable instrument, which naturally will generate questioning of the traded instruments themselves.

Maldonado (Uruguay), 06.02.2023.