053 - Bitcoin Meets Fintech: Revolutionizing Banking for Latin America's Unbanked, Ditobanx

In this conversation, Guillermo Contreras, CEO of DitoBanx, discusses the integration of Bitcoin into traditional fintech in Latin America, particularly focusing on the unbanked population in countries like El Salvador.

He explains DitoBanx's mission to provide financial services to the underbanked, the importance of regulation, and the innovative services they offer, including tokenization and remittances. The discussion also covers the competitive landscape, fundraising challenges, and future expansion plans in the region.

⏤ ⏤ ⏤
⚡  Get personalized onboarding at River for Bitcoin-only financial services: https://partner.river.com/buildwithbitcoin
⏤ ⏤ ⏤

Chapters
00:00 Introduction
04:09 The Growth of the Tech Ecosystem in El Salvador
07:22 DitoBanx: Services and Vision for the Unbanked
10:10 Financial Dynamics and Market Potential in Latin America
13:02 User Behavior and Bitcoin as a Savings Technology
17:29 Tokenization Services and Global Liquidity
20:18 Regulatory Landscape and Its Importance
23:31 White Label Solutions and Partnerships
26:15 Future Expansion Plans and Market Strategy
29:33 Navigating Competition and Regulatory Changes
32:13 Fundraising Challenges and Investor Relations
35:30 Closing Thoughts and Future Events

References
https://ditobanx.com/
https://x.com/ditobanx

https://www.buildwithbitcoin.xyz/
https://x.com/BuildwBitcoin
⏤ ⏤ ⏤ 

❗ DISCLAIMER: This show is for entertainment purposes only. Before making any decisions consult a professional.

Transcript

Guillermo: 0:00

In Latin America, there are still 684 million people that doesn't have traditional services. Out of those, 484 are fully unbanked. That means never had a bank account, never had a loan, never had a card, never had anything. So those 484 million people in Latin America represent almost 60% of the population.

Israel Munoz: 0:33

How does a traditional FinTech incorporate Bitcoin into its business model? And why is Latin America, particularly El Salvador so ripe for disruption, we speak today with ditto bank, CEO Guillermo on these topics and more. If you enjoy the content, please remember to like, follow or share as This all helps us greatly. As a reminder, this podcast is for educational purposes only. Lynne and Israel are partners at Basel air advisors, where they employ their strong network of Venture Capital Partners and startups to connect investors with unique opportunities within the Bitcoin innovation space. Alongside this, they support founders with their strategic growth and fundraising goals. Visit our website's advisory section to learn more. Welcome to build with Bitcoin. I'm co host Israel. Munoz joined with co host Lynne Bairstow. Today we welcome memo Contreras from dito banks, welcome. Thank

Unknown: 1:23

you, Israel. Nice to be with you.

Lynne Bairstow: 1:25

I'm very excited about this conversation, because I've known memo for many, many years from when you first started, and so it's been really exciting to see. I mean, really, even before I was involved so much in Bitcoin and more involved in just general tech startups and watching you, and obviously my interest in Bitcoin, it was, it was fun to watch, but memo talk a little bit about what ditto banks is, and the fact that you are based in El Salvador, which makes it very interesting. But we also want to kind of dive into how you started it and your Bitcoin journey, which those two things are very closely aligned, which is not the case with a lot of our founders. Usually, Bitcoin comes first and the company comes after that. But yours was kind of simultaneous, if that's correct, perfect. Yeah.

Guillermo: 2:13

Well, let's start with the I am Salvadorian. I was born, you know, Salvador, 4545 46 years ago, so you can see that in my hair. I have always been involved in technology. I'm a computer engineer as professional. So I've been involved since I was 18 years old in my first tech company, which was about vehicle location, GPS tracking. And then we evolved, after a couple of years, into a outsourcing software development outsourcing company, and there is where we started doing some financial technology products for all the regulated companies that allowed me to meet all the regulators, all the regulations and all the procedures to bring the right FinTech product to the market, and what brought me to Bitcoin is that we were in the middle of creating a payment gateway solution back in 2019 like 2020 when President bukele announced the Bitcoin law in El Salvador. So we already held the team. We already knew the regulators, the regulation. We were right in the middle of creating a product exactly for processing payments. So we said, Okay, let's start doing it with Bitcoin. Let's go into it and let's start taking this opportunity. And we did. We were the first company in El Salvador that received the Bitcoin license. Actually, we were the first private company besides Chivo wallet in El Salvador. We were the first private company that process a Lynne transaction over here. But, well, we started evolving from there. We started this. We started discovering some other things that the users wanted. When you go through the masses, you start discovering a lot of necessities, and we started pivoting into that. So yeah, that's that's how we started,

Lynne Bairstow: 4:09

Mama, there wasn't at that I know that bit since under President bukele in the Bitcoin office, there's been a lot of growth and technology development in El Salvador in the last couple of years. But when you first started there, how, how large was the tech ecosystem in El Salvador and and the talent pool for developing technology, you must have been one of a small number of people that were focused on that at the time. Yeah, that

Guillermo: 4:35

was right. Actually, there were only around 15 financial technology companies. You know, some people are doing all kind of stuff different from Bitcoin, doing loans, instant payments and many other things. And right now, there is around 145 companies on the registry of the central reserve bank that deal only with Bitcoin. And there is almost. 50 to 60 more on the digital asset side, that deals with all the rest of the of the of the digital assets. But yeah, it has grown a lot. We have seen many big companies going through El Salvador, people experimenting. We we have seen many efforts in education. Wonderful job. What COVID Plus is doing in, you know, suburb, by educating people. And the Bitcoin office has been doing a lot of work, very good work for towards implementing Bitcoin. So, yeah, this, this has had very good results, and you can see them now. A lot of companies still doing it.

Israel Munoz: 5:38

Yeah. I mean, that's those are some pretty impressive, you know, figures, memo, especially for the size of the country, right? I mean, the the case of El Salvador is, is just so unique. I mean, that growth per capita of both physical and human capital, that that's been just kind of on an exponential growth since, since that, that law came into place, kind of goes to show you that how much can be done with with sound regulation. You know, regulation is not the most fun topic always. You know, sometimes people don't, don't want to get too into it. But, you know, I think your company is, is a perfect case study of of a traditional tech company that sees the opportunities, sees the sound regulation, and is able to just kind of take off from there. So you know, anyways, it's, it's, it's pretty impressive some of the numbers you speak to, and so memo, what? What are some? What are some of the basic services that data banks provides, you have three different business segments, as I understand it, individuals, businesses and tokenization. But you know what, when you when we're talking about financial services, what does data banks do? Well, we

Guillermo: 6:55

started with the vision Israel. We wanted to help the under bank and the unbanked population in entire Latin America. So from that perspective, what we first did is that we started talking with the people on the streets, trying to understand what they needed. When I always approach people on the street, I always ask them, How can I help them? What they expect from dito banks and I never hear words like blockchain, Bitcoin. No, they are very simple. They always say, help me to sell more. Help me that things cost less, or provide me with capital for my business. Whatever you do to give me that I'm okay with it. So we went ahead and we understood that they don't care about the technology that we are using on the back, but they understand about the value that we are providing to them. That's very important thing. And then this is one of the main things that most of the company needs to understand. Because I have seen wonderful products. I have seen marvelous technology, but it is not solving the real problem that the people wants to get solved on the streets. I mean, if you go to the to the Central de Abasto in Mexico and ask someone that is selling fruits on the street if they want to create a custodial wallet with their seeds. They don't even know what it is, but if you tell them with this, you're going to be able to do that, they open their ears and they start seeing the opportunities. So that's what we started doing. Digital banks is now a financial technology with a vision of becoming a NEO bank in all Latin America. We have a presence now in seven countries. We have offices in the US, where we have money service business to originate remittances, which is one of the things that they always wanted to receive their remittances, instantly and with low cost. We have physical offices in Mexico, Guatemala, El Salvador, Costa Rica, Panama, and we just started Colombia. So it has been a long, long way, you know, but trying to understand people needs. And for this, we created three different verticals with the first one, we call it the retail vertical, where we offer traditional financial services using Bitcoin rails and some stable coins rails to provide these services. I'm going to get into it in a minute. We have the second vertical, which is tokenization services, real world assets, tokenization based on El Salvador law that we're going to talk about it in a minute as well. And finally, we have a white label services vertical, where we provide other regulated institutions with solutions so that they can provide exchange services without touching Bitcoin or digital assets, and we provide them with the ability to issue a card, a credit card or a prepaid card and many other things. So on the retail side, we serve both individuals and companies, and what we do for them? Well, everything starts with providing them with digital accounts in less than five minutes. These digital accounts are in Bitcoin that they can use on the mainnet and also over the Lynne protocol, and they have USDC and usdt over Ethereum as well. And in some countries, they also have their local currency, like in Mexico, we are having also Mexican Pesos built on the product as well. So all this happens in less than five minutes from there, we provide on and off rails for depositing and withdrawing money through traditional banks, like, for example, in Mexico, we do it. We do it over the spay protocol in El Salvador transfer 365, in the US Ach, and same in the other countries, we also provide rails for depositing and withdrawing cash through correspondence. That means that you can go to any store. For example, in the States, you can go to CVS, Walmart, Walgreen, and deposit cash or withdraw cash from the balance that you have on your products. And the same happens in Mexico, Guatemala, Costa Rica sub or you can approach any store and withdraw and deposit cash. Of course, we do remittances. We originate them using our money service business license in the States, and we deliver them instantly to all the other countries that we operate. And we deliver that money in local currency without the user knowing that in the back we use Bitcoin or other any or any other stable contributor that transmission of value. We do cross border payments for companies. We are also helping many companies that are moving money from in, in and out, from into Mexico and from China, from Colombia, from Guatemala, from El Salvador, or receiving payments in the US, we provide our users with virtual accounts in the US that allows them to receive an ACH or a wire transfer, and it gets converted and deposited in their wallet instantly. In the other side of the world, we also have payment acquires, which means having physical terminals and all the tools for receiving Bitcoin payments, overlining payments with Visa and payments with MasterCard. We issue credit cards. We issue prepaid cards that depends on the country. We have insurance products, and we are starting with our loan vertical on that retail side. So that's what we do, just on the retail side of services. And as you can see, we have all the products that you will find on a traditional bank. We have them now available for our users for doing bank regulation in less than five minutes. So that's only on the retail side. I don't know if you want to. You want to know more about

Lynne Bairstow: 13:07

before I do, I have a question. I think, because you said that your target market, when you envision this, is a lot of the unbanked and underbanked populations in Latin America, and traditionally, those have not been served because of the expense, I mean, the profitability to the bank and the expense for the user just didn't make sense. But because of the efficiencies that the Bitcoin protocol provides, you are able to make this profitable. Can you talk a little bit about how, from the user standpoint, what their fees look like, and how you're and what the market size potential is. From your standpoint, I'd love to know a little bit more about the financial dynamics, about why this has never been able to be offered profitably before. People have ignored this market, but you're really making a rapidly growing business on this?

Guillermo: 13:58

Well, that's that has two answers. First one is in Latin America, there are still 684 million people that doesn't have traditional services. Out of those, 484 are fully unbanked. That means never had a bank account, never had a loan, never had a card, never had anything. So those 484 million people in Latin America represent almost 60% of the population. This doesn't happen in the US, in Europe, in Asia, where the bank rates are a lot higher, like for example, in the States, 95% of the population has access to financial services. Latin American, in contrast, has 65% of people not having access to these products. So that is why Latin America is our scope. We are we don't intend to go and operate in the US or Europe, in the in the in the in the next years, we are very focused on Latin America. Because of this build with

Israel Munoz: 15:01

Bitcoin, is a proud affiliate partner of river, a Bitcoin only financial services company that I've personally been using for years. I really enjoy the strong folks they have on security and reliability, which ultimately leads to peace of mind. I know you. You're a big fan as well. Lynne, I am,

Lynne Bairstow: 15:17

I am. I feel so confident referring people to river, in addition to what you mentioned, also, they've got us based phone support, which I think for somebody who's less familiar with the space or used to personal service, is really helpful. In addition, they have a private client services division, so if you're looking to invest 100,000 or more, they have a special suite of services designed for you, whether you're a high net worth individual, a family office or trust. I also really appreciate the continued improvements they make in the back end, so that that reliability and security continues to be really apparent.

Israel Munoz: 15:49

They they additionally also have US dollar cash deposits paid out in Bitcoin. They have a yield product for that which is an interesting alternative way of accumulating Bitcoin. Overall, fantastic suite of services if you're interested in onboarding and opening up an account at River use partner.river.com/build, with Bitcoin for personalized onboarding.

Guillermo: 16:11

And the other thing is that the approach that we have towards bitcoin is helping people to understand how they can use it instead of a savings account, it is very difficult to teach them to use it on a daily basis, because one factor, and that's why we have stablecoins in our solutions, because most of the people in Latin America live with around six to $7 per day. This is the typical unbanked situation of the population they live with six $7 per day. What they sell on the day is what they use to have dinner that night. So it is very difficult to expose them to any kind of volatility, for good or for bad, because 25 cents of difference means three tortillas menos in in their in their table. So we try to bring them first into the technology, show them what they can do, how they can sell more, make things cost less with the with the tools. And we put Bitcoin at one click, and we teach them that every dollar of profit that they are not using on that day, they just can simply click a button and move it into Bitcoin and leave it there. So that's that's the approach that we have with the unbanked population, with the Bitcoin population that we have is totally different. With traders, gamers, or other types of segments is very different, because they go directly to Bitcoin and stay there. But again, when you go to the lady that sells fruits on the on the central de, a different story. You need to give them the right tools so they can keep doing whatever they do already. But besides it, you teach them how to start saving in Bitcoin in one click. So that's what we do. And of course, we also give them a card so that they can spend their money, and we provide them with access to ATMs, with insurance and all the other things that I told you on the on the retail side

Israel Munoz: 18:19

by you plugging Bitcoin into your business model memo, it seems like you're kind of addressing two different powerful growth verticals. I'd say. I mean, one, there's the just efficiency gains from this new technology, like your remains, example that you mentioned, it's just used on the back end, and it just creates a more efficient experience. And then there's the completely new aspect of Bitcoin rails, whether it's, you know, using it as a savings technology, or whatever that may be. I mean, do you think a, is that accurate? I mean, it's, it's helping you both on the efficiency side and also just as a completely new savings technology for your users. And B, I mean, how, how do you observe this user behavior. I mean, are there any trends you can speak to of your user base? Do you see most people using data banks just for the pleasant additional experience, let's call it and or are there an ever growing number of users that are using it also as as a savings technology? Or

Guillermo: 19:20

yeah, there is a big reason of why we use Bitcoin as a savings technology, and there is also a reason of why this is the only solution for them, because in order to provide a return on the money to a user, you need to do something called financial intermediation that involves receiving money from the public, using that money for providing loans, for example, and then give some interest in return. That is all that is a thing that only licensed banks can do. And from the traditional financial technology companies standpoint. You cannot do that in any way, because you cannot request money from the public and use that money to provide loans. You cannot do financial intermediation. So how can you provide value to these users without falling into financial intermediation? Well, that Bitcoin is the answer for that. If you give if you put Bitcoin on their hands, they can make their money growth in time, and you are not violating any regulation. So that is why we use Bitcoin as a savings instrument for the public and for the second question, we see total different behaviors depending on the segments that we approach, as I said, for example, Bitcoiners. We you, we see the use of our tools by Bitcoiners to keep their money and to convert it and use it immediately, whenever they want, whenever they want it, but they mainly store their their Bitcoin over there. But if we go to the training segment, we see users moving their income into the wallet just to monetize, just to withdraw it in Mexican pesos or any other currency or to use with the card. They don't keep it there. They just use it directly. And if we go to the bank, population segment is totally different. They they use it for their day to day operations, for receiving remittances, for paying their bills, and we only see a small amount of that money being converted to Bitcoin to start saving. So it's totally different. It depends of the segment. And then we

Lynne Bairstow: 21:44

kind of interrupted you to dive deeper into the retail side. But please go ahead and talk about the other two, the other two pillars of your business.

Guillermo: 21:52

Oh yeah, perfect. Well, with the bird, with the tokenization vertical, what we do is that we use one of the laws that exist in El Salvador, which is the digital asset law that enable us to act as an tokenization structure. We can also act as custodial and we can also act as an exchange. So based on that law, we can provide these services to mainly corporations and big projects that are looking for fine for financing, or looking for money to to build their projects, the tokenization is a is very similar to the traditional instrument that exists in all the markets in all the countries, which is called titularization, or bringing a an instrument to the to the local stock exchange, the process is very similar. You have an issuer that owns the project. You have a company that does the structuring of the product. In that case is zero banks on the digital side in the in the traditional side is these are the traditional casas, Corona devols, brokers, exchange brokers, then you have the risk assessment companies, which in the traditional side, you have Standard Poor speech and ratings and all these type of audit companies. On the digital side, you have the equivalent, which is companies licensed by the Commission to do this risk assessment. And in the end, you have a regulator, which in the traditional side is the superintendency of banks or the or the central reserve bank of that country. And on the digital side is the digital assets commission in El Salvador that was born because of the law that was created. But in the end, what we do is that we tokenize future income, we tokenize debt, or we tokenize equity for companies and we help them raise the money. What are the main benefits of tokenization? The first one, probably one of the most important ones, is that it gives you access to global liquidity with a traditional product, you can only go to local stock exchange to sell that product. But with a tokenization, you can go to many countries. You can go to almost any country except Canada and the US, but you can go to any other to look for investors. So it gives you access to global liquidity. Second, it gives you access to liquidity very fast, because these investments can be paid either in the traditional way, with a wire transfer, with an ACH, with Swift transaction, but you can also pay using Bitcoin or using a stable coin that allows you to have an investor sitting in Singapore and wanting to invest ten million and we can complete that transaction in the next two hours. If you try to do that in the in the traditional way, I can bet you that you're going to be there almost a month trying to do that. So it gives you quick access to liquidity. Third one, it is all tax free. Based on El Salvador, all capital gains of of a tokenized product are free of tax on capital gains, and also the person or the company investing on on a tokenized product is also tax free on the on the proceedings of this investment. So it makes sense to operate because it makes your rate of return of the capital grow exponentially. So it is very interesting. And the fourth and final benefit of the tokenization is that you can use it to democratize, democratize the investments, because you can make it as small parts as you want, or you can make it in big parts as you want. So you can make, for example, a token investment of $1 or you can make it of $100,000 it doesn't matter, but you can make it available to the public. And for this, we are using some bitcoin technologies. Like, for example, we are part of the liquid Federation from block stream. And we use liquid to do some of these, of these tokenizations. And we also work on top of the ERC three, 642, protocol that brings the smart contract contracts into Ethereum. So we use both technologies, but it is a very interesting thing. And we have tokenized right now, almost$64 million in order for other companies. And we just did a big project, which is the inter oceanic corridor of Guatemala, a road and a railroad that puts together the Atlantic Ocean with the Pacific Ocean in Guatemala project of $332 million and we are seeing all kind of different things happening on the tokenization side. So, very interesting, very interesting. Going

Israel Munoz: 26:45

back to the to the first couple minutes of the conversation, thanks to some of the clear regulatory guidance in El Salvador, that is not quite there in many of the other Latin America countries. Memo, what's your what's your outlook on this? I mean, you, you have, of course, of some first hand insight into how some of these markets are evolving on the regulatory side. How do you view this going forward for the other countries outside of El Salvador? Do you think they're starting to get it and see the opportunity? Or where, where are the other jurisdictions that you operate in? Well,

Guillermo: 27:20

very interesting. It depends of the of the vertical. But yeah, almost any country has something to say about what we're doing. They are either working on a regulation or already have some sort of regulation. Actually, El Salvador probably was the hardest country for us, because we have regulation. And that is good. I mean, I don't want to be misunderstood. That is good. I really believe on regulation. I know that I'm going to get a lot of fire on this, but regulation prevents bad actors to come into the market. If we didn't have that strong regulation in El Salvador, I can bet you that we are ready, that we could already have bad actors doing bad stuff in El Salvador. That's the danger, danger in other countries that don't have regulation. But what we do is that we obligate ourselves to be under the scope of the regulator, applying to other different laws, like, for example, money transmission laws that obligate us to to comply with all the anti money laundry regulations. And if there is any specific regulation, we go and comply with it. In that country, we have compliance teams in each country, local lawyers, local accountants, local compliance team, local operations teams. In order to do this. It hasn't been easy, but it has been exciting. I could probably write a book on each of the countries that we operate right now in terms of regulation.

Lynne Bairstow: 28:50

That's something that I know even early on, when we first started speaking, you know, I think sometimes Bitcoiners have the cyberpunk mentality and and, you know the peer to peer is such an important ethos to them, but when you approached your company, you really did it from a standpoint of wanting to be a regulated financial service provider and and you went deep into it. And even the US, where you don't have as active of daily operations as you do in other countries that you operate in, but you still have a FinCEN license, which is, as I understand it, talk to us a little bit about how you view regulation, why it was important for you to build ditto banks in this way and and what you see the benefits are. Well, one

Guillermo: 29:34

of the things that I knew before getting into this was how important regulation was probably is something that many other companies miss. Sometimes I knew that if we didn't have the right compliance and the right compliance and the right regulation structure, we wouldn't be able to create the right partnerships with banks, with with Visa and master. Are with Western Union, with other traditional companies that we need to provide these services. I understood that very well. Actually, whenever they ask me, I always say that my business is 60% regulation and 40% technology. We spend more money, time and brains in regulation and taking care of that in order to be able to put our technology on the street, and that is the reason that allowed us to have bank accounts in all the other countries. And if you ask any bitcoin company, they are always going to say that their biggest challenge is having bank accounts in any country or moving money around the countries. That's the biggest challenge for us. Is not a challenge because we took care of that regulatory part first, like for example, I can, I can give you two examples. Our two biggest partners in Mexico are BV UVA. We are part of the spark program in Mexico, and Grupo Salinas, banco steca, because we were very strong, we have a three, 300 pages anti money laundry manuals that are review page by page, and we need to comply them in order to be at the same level than them. And when they when they are okay with that, they open all the doors for us. So that is very important in each of the countries, and the same happened in the states. The best way of obligating yourself to be under the scope of the regulator is registering with FinCEN, because the money service business license obligate you to do anti money laundry compliance reporting obligations, and that's what they need to see in order to give you any service that you

Israel Munoz: 31:45

want. Yeah, you know it's, it's so true what you mentioned, uh, memo, I, I, we didn't get to get into this part before the the conversation today, but I, I attempted, uh, remains business precisely kind of what you're mentioning that as far as just using it on the back end, and on the front end you have the fiat currencies. I tried that, that startup using Bitcoin technology on the back end in 2014 and ultimately, after two years, we were unsuccessful. And the number one thing that I would attribute that to was we underestimated the the massive weight of legal and compliance. And without that, I mean, you know, like it or not, you, it's just you. You can't move forward if, if you don't have those, those box checked, right? So I think, I think you're spot on with, with everything you, you mentioned there. And then maybe we can segue on to the third market segment that we haven't gotten into, which is the business white label solution, I believe, well,

Guillermo: 32:44

on the white label vertical, what we do is mainly four things. One is that we offer other regulated institutions the ability to act as an exchange without touching Bitcoin digital assets or regulation. What we create is a third party agreement where all the Bitcoin and digital assets are touched by us, and all the delivering of fiat currencies are also done by us with an account on their institutions. So that allows them to offer a person to do an exchange directly on their on their locations, and without even touching that digital asset. We are working with 212, three banks now, two in Bolivia and one in El Salvador, doing this. So this is one of the first things. Second thing is that we create white label remittances channels for them, for example, for for a bank, regularly they they, how do you say they delivered? Or they convert traditional remittances from traditional companies, from Western Union monogram and all these companies. But they don't have their own channel under their own name. We give them this technology. We receive the money in the US. For them, we move that money into their accounts, and they sell it as their own brand. So that's the second thing that we do. Third is carp co branding. We have financial institutions that are smaller, like, how do you say unions, small unions and small financial or lending companies that probably have 5000 10,000 users, but they don't have the enough technology or money to create their own card program. So we provide them with this service. We can issue a credit card or a prepaid card with their brand, but it all works in our technology infrastructure. And the fourth thing that we do on the white label services is what we do loan origination for third parties. We put our technology and our users or our user base, we expose. Our user base to their services, and we commission from that like, for example, if you have a small financial institution that wants to expand their loan book, they send their offering through our tools, and we originate the information through our tools. We do the disenforcement through our wallet, and we recover the money through our field channels, and we charge a commission for that, but we help them to provide more loans, and we help our users to receive the right set of products into their hands. So yeah, that's what we do on data banks. In a few words, that's our three verticals, retail side, tokenization side and white label services, and

Lynne Bairstow: 35:43

this has all been accomplished since 2021 correct is that the kind of the start date? So that's a lot to have pushed forward in a short period of time. What do you see on the horizon? What I mean, it feels to me that you always have bigger visions and bigger are you looking at new markets in LATAM or elsewhere? Are you looking at additional products, services? What? What's on the product map for ditto banks?

Guillermo: 36:12

Well, we didn't have a plans in 2025 to operate in Colombia or Bolivia, which is our next country, but we were almost obligated to do it, so we have to expand our operations to Colombia. It is something that we are working right now and almost starting in Bolivia in a couple of months. But Colombia is our base country to the expansion for South America. We almost close the entire North and Central America, and we need to keep growing through South America. Probably in the next two, three years, we're going to be in Brazil. No, well, sorry, Argentina, Chile and Peru, Brazil, probably in the end, but it is something too big for us right now, but yeah, we need to keep going into our South American expansion right now. We are not adding any more products to our offering, and we are only focused on growth. We are we spent on the regulatory side and building all the strategic partnerships and products and approvals from visa, from MasterCard, from governments and everything else in the last two, three years. Right now, we have everything that we need to start growing exponentially. And that's what we're doing. That's that's what we are already did in El Salvador, and that's what we are about to start in Mexico and Guatemala in the next couple

Israel Munoz: 37:38

of weeks. Oh, you're certainly on the right path memo, you know, I'm curious how you look at competition memo, and specifically, let's say, some of the larger Neo banks in the region that have not yet, you know, adopted the Bitcoin technology rails, but are maybe looking into it. How do you, how do you strategically look at that going forward. I mean, what are some of your advantages? What are some of the challenges? I guess?

Guillermo: 38:06

Well, that's key, you know, because whenever we try to find who are our competitors with the same set of pros that we have, it's very difficult to find one that accomplish everything or the same that we're doing. There is one that we believe it is our biggest competitor, which is Mercado Pago. Mercado Pago has everything that we do, including digital assets, Bitcoin and everything else, and we are seeing revolute right now, going into the same path, and no bank started dealing in Brazil with some digital assets and some bitcoin in a very strange, weird way, but they started doing it. Probably our advantages are that we are quicker in our go to market strategy. We are in different countries, like, for example, new bank is only in three countries in Latin America, which makes sense. But they are not attending the unbanked population as they as they should. We are doing it. That's probably our advantage. We have a location in the US that we, that we use for money, remittances, origination, they don't. They use a third party to doing it, to do it, and that's probably the big differences that we have, and and money. They have tons more money than us. But that's not a problem. We are doing it well to

Lynne Bairstow: 39:34

kind of circle back a little bit to regulation and how that impacts. I mean, it's a it's a moving target, as we've seen even in recent in the last six months or three or four months, but in the US, regulatory environment has gotten a little easier, I would say, where it may have been much more complicated to get banking services and to go through Vince and approval. I think under the new administration, it's eased off. Quite a bit. But at the same time, in El Salvador, your home country, there's been some changes to the Bitcoin law based on new conditions that were set by the IMF on their loan to El Salvador. How do you how do you navigate those changes? And have you seen anything substantial, especially in El Salvador, which is a core market for you. Well,

Guillermo: 40:23

nothing has changed in terms of the products in El Salvador with the recent changes that happened with the law. Bitcoin is still circulating, is still being used. We are teaching it. Nothing prohibits us from did, from teaching about Bitcoin, from using it. So it is still, I don't want to say currency, but it is still a legal instrument to use. So nothing changed from that perspective. And the other very important thing that I was speaking about in a recent conversation that we had with some other partners is that Bitcoin doesn't really need a country to do what it does. I mean, we are doing it all over the world. We are doing it all over Latin America, and what happened in El Salvador doesn't impact us even a bit. So Bitcoin is going to keep growing, with or without El Salvador, and of course, it is my home country, and we want to keep pushing it there. But nothing stop us from from doing it as well in Guatemala, Costa Rica, Panama, Mexico, the US, Colombia. So nothing changes from our perspective and the new the new administration in the US. Well, things are moving as we expected to be, but we still need to see the final operational actions that really does something different. I mean, right now they're just saying that they're going to do this and that they're going to change this and that, but banks are not yet taking actual actions in order to start moving we expect that to see in the next couple of months, and we're going to see how that evolves. I mean, it is good. The market is big enough for having many competitors. We don't expect to do everything with a single company or by ourselves. We need more companies doing the same thing to keep Bitcoin growing. So everything is good. From my perspective, everything is moving good. I

Israel Munoz: 42:32

mean, I love that perspective memo, because, well, first of all, it's just objectively true, right? I mean, Bitcoin just due to its open source nature and accessible to all, it will continue moving forward with or without, you know, any individual person, company or country. So I think it really is just more so opening your eyes to the opportunity which, which you guys, that is right clearly are and, you know, maybe touching a little bit on the company's growth as an organization memo, can you tell us a little bit about because you're in a very capital intensive industry? Oh, yeah, how, what has been your approach? And maybe, you know, even recommendation for us. You know some other FinTech entrepreneurs out there who might be listening to this as far as as far as the fundraising component. How have you been able to accomplish that? What has that journey been like, just growing the company itself? Well,

Guillermo: 43:33

we started to say traditional startup. We went through false and family and friends racing, priesthood racing. We have our seed around active right now for ten million but probably the one thing that I will recommend to anyone getting into the industry is to consider in their budget the regulatory part. It is very big. It is very expensive. You need to have human resources active for many months without being able to do a single operation or to generate a single penny in revenue, and you still need to have all these human resources active in order to comply with the regulation to get the approval to do something that needs to be taken into account in The budget. And this goes not only for the entrepreneurs, this also goes for investors, because there are investors that do not understand how the financial technology path happens, and they expect to have results very quick or to have a minimum viable product in one month into the market and regulatory that is impossible. You need to go first through regulation before putting a product on the street. So there is a big difference about investing in a traditional setup and a financial technology setup. And even more, if this. FinTech deals with Bitcoin and other digital assets. It's it has an additional component, an additional difficulty, and that needs to be taken into account in the in the Bulgarian and other than that, it has been a very exciting journey raising money in the hardest time in the last 20 years. It is something that I can also write a book. I mean, I think that's one of the reasons whippers met with Lynne. I was just crying, telling her how difficult it was to to raise money at that point in time, because it's when the FTX thing happened, and all the banks went down, the financial market went down, and we were in the middle of that raising money, but we were able to do it. And we also have this current round almost closed, so that's good news as well. And we plan to keep going, keep growing, and keep doing things that the population, the bank population, really needs

Lynne Bairstow: 46:03

Emma when you when you find your investors. I mean, first of all, congratulations on that, because I having worked in the lat am tech ecosystem for years, it's hard for it's been harder for a lot of startups to raise at valuations or or even get the attention from investors. And then, you know, to your point, layering Bitcoin on top of what you're doing, but you've been successful. I mean, what are, who have been your typical investors? Are you talking to the Bitcoin VC community? Are you talking to traditional FinTech investors? Are Family Offices more agile and able to understand the kind of the promise of the Bitcoin financial technology, or who are some some valid investors, or better investors for you?

Guillermo: 46:48

Well, we have both. We have both types people that has the vision to understand what we are doing with the entire ecosystem of products that we have, and people that have come to us because what we're doing with Bitcoin. So like, for example, we have a full group ventures in our cup table, which is a fully Bitcoin venture capital fund. And well our our first angel investor is a fully maximalist bitcoiner as well, that put their faith on us. And then we also have other funds that are traditionals, like our phone and arcangeless from Mexico, that they deal with traditional financial technology, and they also put their faith on us. So we have both types of investors. I will say that probably what we're doing is a lot bigger than we initially what we what we initially thought was it was going to be our perspective as a NEO bank is complete now. It's not just a single This is not a digital wallet. Is not a credit card, it's not a remittance company. It's not a single thing. It's, right now, a full neobank. And I think that it is not too difficult for venture capital funds to understand this at this point on time, probably the biggest or the hardest question to answer right now is how we make money. Well, we have 16 different revenue streams across the three verticals, and I need to sit down and say, Okay, give me two hours so that I can explain you how we make money on each of these revenue streams and how it works, and what implies in terms of regulation, pro go to market, go to market strategy. That's the other hard question that I always have to answer when they say, Okay, what is your go to market strategy? And I say it depends on what vertical, for individuals, for businesses, for what segment. I mean, there is a total big strategy for what we do right now is not a single thing, and that is probably also the challenge that we face to raise more money, because people expect us to explain our company in 30 minutes with a pitch deck, and that is impossible. We need to sit down with a cup of coffee for three hours so you can fully understand all the things that we're doing and where we're where we are

Lynne Bairstow: 49:18

moving. So strategic investors are important for you, too. So anybody in the region that has that has that can open doors to to some of these relationships and things would be of value to you.

Guillermo: 49:31

Totally, yes. And we have also a couple of them that are family offices, that has opened mostly, and we are very interested in organizations that deals with Micro, Small and medium companies in the countries, and we are working very close to them in order to do education and to penetrate the products that we have into that ecosystem. We have a strategic part. Partnerships more than investors that allowed us to do this, we work very closely with government organizations as well in order to reach all these segments. So yes, definitely, we are interested in strategic investors that can bring these segments of population to us, or that already have companies that are dealing with this, and they want to put together the other financial instruments that we have, besides the other pros that their other portfolio company have. Yeah, definitely.

Israel Munoz: 50:32

It sounds like you're at a very pivotal point of your business, and it's an inspiring story, honestly, and it's addressing a very real problem in Latin America, and a lot of that, a lot of that population is currently completely neglected, right from financial services, it's an inspiring story memo. I mean, thank you for for sharing everything that you're working on and and none of that is to undermine, I mean, the the massive challenge that I'm sure it has been to to get to where you you are right now. So, you know, wishing Much, much luck. And as we wrap up, I guess, is there any, any other advice or comments you'd like to close with, or, you know, where maybe people can find you can reach, reach out to you personally, or do banks. Thank

Guillermo: 51:20

you, Israel. Yes, there is one thing, and this is something that moves the entire organization. We believe that if we can change the situation of one person, we are impacting not only that person, but the next generation and the next generation. We believe that if we can change the financial situation of one company that is going to cause an impact on their kids and on their knees. So that is something that we always keep in mind. If we want to change the economy of our countries, the unbanked population is the way of doing it. They generate the most of the employment in a country they generate, they move the economy, and they are not being served the right way. So, yeah, I want to invite more companies to look into this segment, to find the right products and to help change the economy of their countries through financial inclusion. It is very, very important. And for the rest dito banks is just like that on all the social media at dito banks everywhere. And for my case, you can find me on LinkedIn as Guillermo hota Contreras. I always answer all the comments and connections. I'm always very open to to any collaboration or to help any circular economy anywhere. So yeah, I'm very happy to keep growing and to keep helping the community as much as possible.

Lynne Bairstow: 52:51

Lynne, I we ran into each other on the street in El Salvador during the plan B Conference, which is great to see your friendly face there, but, and I know you were recently in Mexico for the FinTech festival. Any other places where you'll be in person, where you'll be speaking and sharing your knowledge,

Guillermo: 53:12

I don't want to think about that. To be honest, we're going to be almost 14 different events in the rest of the year. It keeps me very, very busy, to be honest, but it's something that we need to do. I mean, PR is always important. But for the next couple of months, we're going to be in Panama the blockchain Summit. We're going to be in Mexico again for the final summit and the stable coin Congress. We plan to be in well, in El Salvador, gonna have the FinTech forum in May, we have four more FinTech forums in four different countries as well that we're going to be speaking. Yeah, there, there are a lot of things, lot of things going on. Well,

Lynne Bairstow: 53:56

thank you again for taking the time to speak with us and share your story. And as Israel said, we look forward to having you back on again in the future and catching up with you, and just wish you all the success that you've been working so hard to achieve. Thanks

Guillermo: 54:11

to you, Lynne and Israel very, very excited, and it was a very big pleasure to speak with you, and we're looking forward to see you soon in Mexico or in Florida. You