Bit2Me wants to be the fulcrum of regulators in the crypto environment

Bit2Me wants to be the fulcrum of regulators in the crypto environment

Bit2Me is the first Spanish company recognized by the Bank of Spain as a provider of virtual currency services. Its path runs parallel to that of the regulation of cryptocurrencies; Proof of this is its market launch of Bit2Me Crypto API , a product with which other companies can use the company’s infrastructure and operations to implement cryptocurrency and Web3 white label services quickly, safely and with adequate regulatory compliance. .

The company has private, professional and corporate clients in more than 100 countries and, in 2021, it had a transaction volume of close to 1,100 million euros, multiplying the sum of all previous years by about 10 times.
In Economy 3 we speak with Javier Pastor , director of institutional relations at Bit2Me , about the challenges facing the cryptoactive market.

The arrival of the digital euro

Actually we are already in a situation where 97% of the money we use is digital. Only 3% of the money we spend today is in cash. It is true that to achieve an objective such as financial inclusion, having digital money would help a lot to reach places where it is not profitable to maintain financial entities. I think it’s a natural evolution of money going towards a digital tool.

We are delighted to integrate this digital euro future with the possibilities offered by Bit2Me . It is a normal process that is not only happening in Europe, but we are seeing it all over the world. It won’t be long until we see him here.
Perhaps we can have problems with some sectors of the population that are not familiar with new technologies and view them with mistrust. That can generate a certain fiction. Even so, I think we will see a transition process where it will be introduced little by little. A part of the population will make the change and the slightly older people will remain in a model like the current one.

Provide confidence

Your model seeks to combat people’s mistrust. What do you contribute in that sense?

Basically, Bit2Me is a 360º solution that combines «fiat» money with this new money that is born from the internet, in addition to all the technologies that surround it. The advantages of using a platform like ours, from the regulator’s point of view, are very clear; since it allows to continue working and filtering that the technology is not used for criminal purposes.

We have always been very scrupulous with compliance with the regulation, the application of the fifth directive, the fight against the prevention of money laundering or the financing of terrorism… In addition, we carry all the traceability of the transactions that come from the world of crypto assets which are converted to fiat.
For all these reasons, we are a point of support for regulators and supervisors in all aspects. An aid so that the transition between one technology and another is done in an orderly manner. Unfortunately, many scams have proliferated within the world of crypto assets. What we contribute to citizens is to be able to give a series of guarantees to users who decide to enter this market.

One leg of the system

-Is this therefore the future of cryptocurrencies? To be one more leg of the transaction system?

It is difficult to define what the future of crypto assets is going to be like, because deep down it is a global technology and it will fulfill different functions according to the characteristics of each country. I believe that in countries where the traditional financial system is quite secure, this technology will be one more leg that develops and improves the experience we have with the traditional system.

Cryptocurrencies do not compete with fiat currency, but rather complement them

It is true that in countries like Latin America, places where the state currency is not a solution, it could become an alternative. What needs to be clear is that cryptocurrencies do not compete with the “fiat” currency, but rather complement them. And in the territories where the currency does not work, I do believe that cryptocurrencies can go further.

An interesting alternative

-What do you think of those who see cryptocurrencies as a refuge against traditional banking?

It is true that, from the historical point of view, we are in a very special moment at the monetary and financial level. We’re seeing things we haven’t seen before. Having negative interest rates for ten years in Europe, the rise in rates that we are experiencing due to high inflation… All this makes those of us who believe in Bitcoin see it as a potential store of value.

Although it still has a small capitalization and volatility will continue to exist, there are markets that could begin to consider it a store of value in the medium and long term. It also depends on how the economy goes. If we have an alternative that many citizens consider interesting to store wealth over time, we can see how it gains traction. We will see how the financial crisis that we have at the door evolves…

End volatility

You commented on the problem of the volatility of Bitcoin. During the last few years we have seen its value greatly depreciated… What can we do to reduce said volatility?

I always like to explain it from the point of view of the halving cycles in Bitcoin . They are four-year cycles that more or less coincide with the 210,000 mined blocks and cause the reward given to miners to be reduced by half every four years. If one moves away from the graph and looks at the price, one realizes that they are accumulation cycles where the price suffers volatility of a 1000% increase and then a 60% decrease, but the minimums are increasing and the maximums as well.

Considering that we started from zero capitalization in 2009, volatility is inevitable. Today we are around 500,000 million dollars of the total capitalization of Bitcoin and that, at a macro level, is very small. It is normal for the inflow and outflow of capital to cause them to have this volatility with respect to state currencies.

Over time, I do believe that there will be less supply, because the bitcoins that are delivered to miners will be reduced and there will be more and more knowledge on the part of the population and more need, due to the devaluation of currencies against the dollar. With a capitalization close to gold the volatility will be lower. This means that the more bridges that are built to access this technology safely, the lower its volatility will be.

It’s a matter of time. If we look back 13 years, the growth of Bitcoin is incredible and there are a number of decisions that have been made to support it.

gain confidence

-Do you think that the path towards regulation that you are taking, hand in hand with the institutions, can make people trust Bitcoin more?

We believe that it is very positive for all stakeholders that there is a regulation. That provides a common framework for everyone that we can stick to. There are many players in the traditional financial market waiting for that framework to define what Bitcoins are and what they entail. That will help reduce volatility because capitalization will rise.

Although we see in the last four months that we are in a fairly lateral range and much more stable than other markets such as stock markets or government bonds. This is an interesting point of view.

Do not put doors to the field

-What do you think a regulation of cryptocurrencies should incorporate to be effective and, at the same time, not be too restrictive?

Just clarity. Clarity about what the asset is, avoiding ambiguities and from a community point of view. Legal certainty, after all.

This goes beyond individuals, it can mean what the internet was once.

Regulators must be very clear about the role of Bitcoin and other cryptoactives if they had to be separated. This is an opportunity, it is a technology that, those who adopt its use as soon as possible, will have a potential competitive advantage over the rest of the players. This goes beyond individuals, it can mean what the internet was once.

The adoption of the Internet in the first instance was positive and it was not good to put up barriers. Then we all have to protect citizens, obviously, preventing them from being used for criminal purposes. Beyond that, we have to see it as one more asset that has come to stay and that is positive.

In short, provide a common framework in which the role of the actors we mediate is clear, with their specifications and requirements. Also for the banking sector to normalize that there is a new type of asset with many synergies with them. It is important not to prohibit and not to limit, always avoiding potentially negative use.