Mexico uses blockchain to fight displacement, corruption
Mexico is one country that is enthusiastic about the power of blockchain in getting rid of several social maladies:
Mexico is one of the first countries in Latin America to regulate blockchain and cryptocurrencies. The Congress of the Union, the country’s legislature, had in 2018. passed a bill in this regard, regulating blockchain technology, cryptocurrency firms and crowdfunding. The Congress did not recognize cryptocurrencies as currency, but as digital assets for which it created rules to prevent money laundering and corruption. The Mexican Central Bank has been given the authority to monitor companies involved in cryptocurrency. With Mexico not having a very clean image as far as corruption is concerned, the country’s government has also initiated studies on the multiple use cases of blockchain and intends to bring transparency in the use of the technology.
In Mexico, there is a community called ‘Blockchain MX’ which works to encourage and promote the use and development of blockchain. Its ultimate aim is to eliminate the problems of corruption from Mexico by bringing trust and transparency with blockchain.
BLOCKCHAIN ASSOCIATION
Besides Blockchain MX, there is the Blockchain Association founded by 7 entities - Bitso, Lvna Capital, ConsenSys, Volabit, Exponent Capital, GBM and BIVA. Its endeavour is to educate citizens in the use of blockchain technology. Among the founding entities, Bitso is the Mexican Bitcoin Exchange that allows users to join the world of crypto with nominal investment, Lvna Capital is a crypto hedge fund seeking value in the blockchain ecosystem, ConsenSys Academy is engaged in educating citizens on the blockchain technology by providing them the professional training by experienced blockchain trainers, Volabit is a cryptocurrency trading platform, Exponent Capital is the first cryptocurrency investment firm in the country that has shown that a decentralized model can eliminate the intermediaries from the financial system, GBM is the controlling entity of financial activities in Mexico and BIVA is the second stock exchange in Mexico.
GOVERNMENT PROJECT
Besides these initiatives, the Mexican Government has undertaken a project called Blockchain HACKMX, which uses blockchain technology to track and validate bids for public contracts. The National Digital Strategy and the Ministry of Public Administration along with Campus Talent are partners in the project.
As a part of the project, the Government launched the Digital Government Vertical in 2017 to encourage hackers and technocrats to transform public services with the help of blockchain technology. Five government institutions and a state government - Jalisco - are part of the project, which has the ultimate aim of bringing disruption in the governmental processes. The departments/services targeted were e.firm, the service tax administration, which is mandated to develop a prototype to integrate blockchain in its activities to confirm authentication, integrity, reliability and non-repudiation of transactions for any signing act, the Public Property Registry, which is aiming to develop a functional prototype for Public Registry of Property and Commerce, Digital Identity, which will ultimately allow complete accreditation of identity of persons living in the country and Mexicans living across the world, Transactional Transfers Support, which is tasked with the responsibility of developing a functional prototype on blockchain which should enable to maintain the traceability of information of transactions for the support granted to a property, and Certificates of Deposit, which is developing a prototype which should integrate Register of Certificates, Warehouse and Goods with blockchain to execute transactions related to Certificates of Deposit.
UNIQUE PROBLEMS
Mexico has certain unique problems, which includes forced displacement and corruption. The population of Mexico grows at an annual rate of 1.4%, which remained constant since 2000. However, during the last 10 years, some areas experienced a drop in the rate of population growth. This displacement, according to some research, has been observed due to the violence perpetrated by armed groups and their uncontrollable crime activities. It is hoped that use of blockchain can overcome the issues of displacement.
Use of the technology in projects like Digital Identity, Payment Systems and Cryptocurrency is expected to help global migrants and refugees. It is also hoped that with a global digital identity, refugees can become the owners of their identity, while the blockchain based payment system can help displaced people transfer money without a bank system.
Corruption is another malady that affects the country. Both the private and public sectors are recognizing the importance of blockchain to bring trust and transparency to the business operations with its features like audit ability, traceability and immutability.
In financial services, the Mexican Association of Insurers is planning to explore blockchain solutions to validate insurance policies, improve compliance and reduce the auditing time.
While blockchain technology is just making its presence felt in the country, both the public and private sectors are aware of the technology’s potential to bring transparency and security to the ecosystem. Mexico is expected to become the powerful leader in the blockchain in the coming years.