Bantotal, a leading bank technology provider in Latin America is partnering with cryptocurrency exchange Bitex to facilitate cross-border payments over the bitcoin blockchain, Coindesk reports.
Bantotal is a core banking service provider based in Uruguay that services over 60 different financial institutions across 14 different countries. Furthermore, an estimated 20 million people use Bantotal’s money management services.
Sebastián Olivera, founder of the Uruguayan Fintech Chamber, told Coindesk, “Bantotal is one of the biggest banking providers in Latin America and is a huge player not just in Latin American but the greater Pacific.” He added, “For me, Bitex provides a great solution for payments and they will be boosted by the structure and name of Bantotal.”
Bitex Chief Marketing Officer Manuel Beaudroit commented, “With this technology, banks can have access to an API and have control of the whole process of [cross-border] payment with visibility and reliability on the bitcoin blockchain.” He also called the partnership a “quantum leap” for Latin American banks, because the average fees associated with cross-border payments are up to five times cheaper using Bitex than international wire transfers. They are also much faster. He cited the fact that payment times between Argentina and Paraguay “dropped from one month to one hour after switching to Bitex’s cross-border payment services.”
Stellar, which is a competitor with Bitex, and specialises in cross-border payments on the blockchain, sees the move as a “positive signal.”
Lisa Nestor, the Stellar Development Foundation’s director of partnerships said, “We think this announcement further validates the value financial institutions are recognizing in digital assets and distributed ledger technology for executing core banking activities, like international payments. It’s also no coincidence these product partnerships are being launched in the [Latin American] market where cross-border payments, even in neighboring nations, can be slow and expensive.”
Bitex acts as a middleman for national and regional banks to convert fiat payments into bitcoin then back into fiat, as opposed to completing multiple fiat-to-fiat conversions.
Beaudroit explained: “If I want to do 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].”
However, Olivera said, “I have to be honest. I think this is just the first conversation. It’s too early to say whether banks will choose to operate with Bitex but it’s a good first step.”