At first, the new service will be available to a few thousand users, but it will be rolled out to all of the company’s 4.5 million Argentine customers in coming weeks.
In order to comply with current regulations in Argentina, Ualá created a special company to provide its crypto service – Uanex, which is based in UK and has the Latin American crypto company Bitso as its crypto liquidity provider.
Ualá is one of the first financial player to launch crypto trading in Argentina since the local central bank in May 2022 barred two banks from allowing its customers access to cryptocurrencies.
The platform only allows for purchases and sales of the cryptos – withdrawals are not available. The minimum transaction size is 250 pesos (USD 0.83). The company did not rule out offering crypto trading in Mexico and Colombia, where it also operates, but there are regulatory matters that need to be studied.
The move is another milestone for Ualá, which was valued at USD 2.5 billion in its latest funding round. The company already provides a slew of financial services based on a prepaid card managed through a mobile app.
In August 2021, Ualá has raised USD 350 million in a Series D round, a round believed to be the largest private raise by an Argentinian company and bringing Ualá’s total raised to USD 544 million since its 2017 inception.
Ualá was planning to use its new capital to continue expanding within Latin America, developing new business verticals and doing some hiring, with the plan of having 1,500 employees by the end of 2021.
In October 2022, the company said in it plans to invest USD 150 million across Mexico and Colombia over 18 months, aiming to break even in Argentina in 2023. Ualá expects to reach 25 million users in the next five years.
According to a New York Times article, even though cryptocurrencies have lost value, many Argentines see them as a less risky choice than their own currency, whose worth has plunged as inflation has soared.
Because so few Argentines trust the peso, they prefer to save in other currencies. About one-third of Argentines believe that savings kept in pesos in a local bank would hold onto their value over two years, the lowest percentage among respondents in 15 countries surveyed in June by Morning Consult.
Nearly 60% of Argentines believe that Bitcoin, one of the most popular cryptocurrencies, would retain the value of their savings over that same period, the survey said. With inflation expected to reach 90% by December 2022, the peso’s worth keeps tumbling, pushing up prices of everyday products and making it virtually impossible to save.
Now, many Argentines are turning to cryptocurrencies as one way to escape the peso. About one-third of Argentines said they bought or sold cryptocurrencies at least once a month, double the percentage of people in the US.
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