Latin America exchange Bitso today announced a new payment product that it says will make it easier and cheaper for small businesses and individuals in the United States and Mexico to complete cross-border transactions, and have more control over when they convert currency through holding U.S. dollar-pegged stablecoins.
The new product, called Bitso Shift, will use Circle’s payment infrastructure so that small businesses and freelance workers can convert between Mexican pesos and stablecoins, in addition to making payments and completing deposits and withdrawals through domestic wire transfers.
Bitso users can hold the equivalent of U.S. dollars through a pool of different stablecoins, and use Circle’s USD Coin (USDC) for transactions, Bitso product manager Carlos Cota told The Block. Wire transfers using Shift take one to two days to clear, whereas the conversions between Mexican Pesos and stablecoins take "seconds," Bitso says in its press release.
Cota said that it's hard for Mexicans living far away from the U.S. border to get U.S. bank accounts. This means they have to convert dollars they receive into pesos, which can carry high fees and unattractive exchange rates. The idea of Bitso Shift is that it gives users the option to hold U.S. dollar value in stablecoins, and then use it as needed for payments or other transactions.
“In Mexico, based on regulation, it is very, very hard for an individual to be able to have an account where they can hold their payments in the currency [in which] it was sent — in dollars,” Cota said. “So, that means that [it] gets automatically converted to Mexican pesos at a rate that they didn’t choose, based on whatever happened on that day. And what users want is to be able to decide when they want to convert that, to be able to do that 24/7.”
Bitso is incorporated in Gibraltar but offers services in Latin America, where it has more than three million users. The company became a unicorn after completing a $250 million Series C raise announced in May.