{ "episodeId": "SLP701", "speakers": { "stephan": { "name": "Stephan Livera", "role": "host", "tag": "STEPHAN" }, "gustavo_flores": { "name": "Gustavo Flores", "role": "guest", "tag": "GUSTAVO" } }, "segments": [ { "speaker": "stephan", "time": "00:00", "start": 0.08, "text": "When I checked, when I wrote a piece on this, three years ago, it was only three percent of households in Mexico that had any sort of financial instrument at all, which we, you mean stocks, bonds, crypto, you know, any, any form of, of financial instrument. You compare that to the US, where more than fifty percent of households have direct stock ownership. This country has been dominated for too long by crypto casinos, and it's time that investors are offered an alternative that not only provides them a- Technology platform where they can buy and sell and, and, and do other things, but also provides actually education and assistance, for that process." }, { "speaker": "gustavo_flores", "time": "00:41", "start": 40.71, "text": "Hi everyone, and welcome back to Stephan Livera podcast. Joining me on the show today is Gustavo Flores. He is the CEO and founder of Aureo, which is a Bitcoin, startup or Bitcoin company in Mexico. We're gonna get into a bunch of things. Now, Gustavo, I know you've had, you've had a bit of a history in, in various different, aspects. Aspects of Bitcoin. So just for listeners, well, first off, welcome to the show, and do you wanna just start with, giving us a, a bit of an overview of your history in Bitcoin?" }, { "speaker": "stephan", "time": "01:10", "start": 70.09, "text": "Certainly. Well, first of all, thank you, Stephan, for having me. It's an honor to be here. I've been a fan of this show for so long, I can't even remember. And my story started in, when I was twenty years old, back in Canada, where I grew up, in Montreal, Canada. I started being part of the" }, { "speaker": "stephan", "time": "01:30", "start": 90.0, "text": "communities in the world that, we, we had a physical space in, in Montreal since two thousand thirteen and just regular meetups, and big crowds. And I started with just investing, mining project that I had, nothing really serious. It took a pivot in twenty nineteen when I became a Bitcoin Maxi after reading, mastering Bitcoin, after learning the technicals, understanding the difference between crypto and Bitcoin, and launching my first startup, Verify. Verify was, at first, we- Research and consulting firm where we would help customers, do self-custody, but it became a platform where you could buy and sell Bitcoin in twenty twenty-one, and then we started also, we got acqui-hired by Bull Bitcoin, where I worked along, me and my teammates, we all tran-transitioned to there. I worked there for about a year until twenty twenty-two. after that, I wanted to dig in deeper into more technical stuff, and like privacy-related, so I went to work at Wasabi. Wabi wallet. I was a technical writer at Wabi for, about a year until it shut down last year, and I've been working at Bitcoin Optech as a contributor. I write the summaries on the poll requests of the ColdBasis, and I've been doing that for the past year, and I now launched, in now a year already, I've launched Swapito, which has now rebranded to Aureo, and I think we'll get more into the details of that. So in, in, in resume, in, in conclusion, I've been working at multiple Bitcoin startups through different roles, mostly related to product and marketing, but I'm also quite technical, so I can bring the bridge between both the technical and non-technical parts of, of the companies." }, { "speaker": "gustavo_flores", "time": "03:14", "start": 194.04, "text": "Yeah, it's interesting. There's so many aspects in that, it's sort of like, where do you even, where do you even start, right? but, yeah, as you said, it's like a long journey of like focusing on kind of research aspects or self-custody, education aspects of it, and then kind of in the privacy world of it with CoinJoin and Wasabi stuff, and then Yeah, I, I'm curious, I, I mean, from your work on Optech, right? Which for listeners, I do recommend go and check it out. I, I, I can't listen to every episode myself, but I, I try to, because, there's a lot of good info and it helps me stay up to date on like technical things myself, right? even though I am also trying to help people stay up to date on some technical things. I think that's probably an interesting point to start on, like this maybe a bit of a divider, not just kind of nuts and core stuff, but just generally there's kind of, I'm gonna say branching of different communities in Bitcoin per se. Do you wanna comment on that in terms of the technical world of Bitcoin?" }, { "speaker": "stephan", "time": "04:14", "start": 253.88, "text": "Yeah, certainly. So I mean, I would say the first thing is that the more you learn about Bitcoin, the more you understand the, the, the least you understand about Bitcoin, right? The, the more it becomes clear that there's more to learn. So this, this is Rabbit hole, right? And, and to most people I talk to about what we write in, in Bitcoin Optech, they, they're, they're very-- it's, it's many like layers in depth of, of understanding, right? Like for example, I cover like press, like pull requests related to changes in, in Bitcoin Core, but to, to understand, like let's say related to Stratum v2, but to understand that, you have to understand what's the problem with, with mining decentralization today and why Stratum v2 is a solution to that, to The technicals of how Stratum B2 works. So, so I would, I would say it's, it's not, it's-- I would recommend everyone to do it, but also to just under-- try to understand, like a topic in, in detail, right? Like, okay, I wanna-- I, I don't have to understand the whole newsletter, I'll just start with this one on Stratum B2 to this week, this month, I'll understand how mining works and how, how, why this brings mining decentralization. So, a-at Bitcoin Optech, we" }, { "speaker": "stephan", "time": "05:24", "start": 324.46, "text": "logical as possible, you know, and not get-- try to make it distinct from the Twitter discourse, which is very opinionated. so we, so we've kind of, we have commented on, on the many issues that, many debates that have happened lately, but- You would, it's, we, we really would, we really don't want it to consume our time, right? We really wanna focus on the technicals behind Bitcoin, the news, the, the changing consensus, so that's what we've been doing, and, and we haven't really taken a side. So I-- most people I talk to about this, you know, are, are very open. It's, it's different in person than online as well, you know? In person, I've-- we, we, I also present the Mexico City" }, { "speaker": "stephan", "time": "06:10", "start": 369.92, "text": "Of course, Bitcoin Optech, it's funded by Brink, Brink funds Bitcoin Core developers. if you don't like Bitcoin Core developers, it, it will naturally you, you might not like the Bitcoin Optech crowd either, right? But, but I, you know, but that's the point. Yeah, yeah." }, { "speaker": "gustavo_flores", "time": "06:26", "start": 385.96, "text": "And I mean, yeah, to be clear, I wasn't saying like, \"Give us your stance on not first core kind of stuff,\" I just meant kind of broadly that there's a bit of a disconnect, right? And I think maybe what Some people see it as like derogatory or whatever, but it's like a funny term, plebslop, right? Like this, kind of like this idea that there's a whole bunch of people who," }, { "speaker": "gustavo_flores", "time": "06:46", "start": 405.9, "text": "like, they're kind of following certain kinds of NGU or kind of engagement content, but w-without sort of taking the time to go and learn some technical aspects of Bitcoin. And I think that's- Maybe sort of what I was getting at there. I'm curious if you have any comment on that. Is that something you've seen?" }, { "speaker": "stephan", "time": "07:01", "start": 421.06, "text": "It's definitely something I've seen a lot. And I think that kind of culture shift happened around the time of twenty twenty, twenty twenty-one. You know, I, I remember in, in Twitter, we used to have more technical discussions back then. Maybe I think the Twitter algorithm also had an interference in, in that culture shift, right? So, but it's natural as, as Bitcoin grows, it's just normal that not everybody's gonna be as technical" }, { "speaker": "stephan", "time": "07:26", "start": 445.81, "text": "To learn about it, we have a great section that's called Topics, where you can like understand, learn about a topic, like unrelated to the newsletter aspect, you can just learn about, Bitcoin topics. I also recommend people to, to, to read Mastering Bitcoin. That has been one of the most profound, books that has transformed, my understanding of Bitcoin, right? But, but it's, it's okay too, it's, it's normal that people don't, don't have the, the technical, understanding of, of everything. Happen as, as Bitcoin grew, but, but it, it is something that we advise a-at all to all people. However, we, we understand not everyone will be able to, to make it, and that, and that's fine too." }, { "speaker": "gustavo_flores", "time": "08:08", "start": 488.06, "text": "Yeah. And, yeah, to be fair, not everyone is, sort of full-time working Bitcoin like you and I are. So, you know, if they have some fiat mining job and they're just kind of loosely following, you know, it's-- there is an element of like, okay, yeah, it's, it is We've got families, kids, and whatever else is going on in people's lives, it's not that easy, but, i-it just is a different- I would say it's a, it's, it's shifted some of the conversations and some of the- it's kind of created a bit of a funny phenomenon of like people being very- I, I think maybe the phenomenon I'm noticing is people are very overconfident about things without sort of actually understanding what's going on under the hood, right? Because they've heard one particular person's take on something and they just kind of repeat that without sort of considering the different views, and I think that's I don't know, it's, it, to me it's a, it's a bit, it's a bit of a, it's, it's a bit annoying in some ways because, it, it kind of degrades the online conversations that we end up having." }, { "speaker": "stephan", "time": "09:10", "start": 549.7, "text": "I totally understand, and I feel the same way. You know, I, I think we should also explore other forums. Twitter isn't the only Bitcoin forum there is, if, if people wanna have more advanced conversations, I mean, delving Bitcoin, a, a big source from where we get our content." }, { "speaker": "gustavo_flores", "time": "09:28", "start": 568.25, "text": "I also see various places," }, { "speaker": "stephan", "time": "09:30", "start": 570.21, "text": "you know, but, but definitely something that, that is annoying. it kind of became political in some ways, you know, it, it took a, a political turn the, the whole Bitcoin culture. but, I, I don't, I, I think it was always bound to happen." }, { "speaker": "gustavo_flores", "time": "09:43", "start": 583.26, "text": "So let's talk a little bit about, 'cause obviously you're, you're in Mexico, you've been there for a couple years, right? tell us a little bit about what you saw. Well, first off," }, { "speaker": "stephan", "time": "09:58", "start": 598.23, "text": "Peruvian, I was born there. I lived eight years of my life there, but I lived seventeen years of my life in Montreal, Canada, and so, so most of my life experiences in Canada. And, I li-- I moved to Mexico during COVID. Mexico was one of the most open countries in the world where you would have almost no entry requirements. I don't know why they did it, you know, were they libertarians at heart? I think it was more like a tourist, tourist strategy. But, I mean, I came here and, and I fell in love with the country, the, the culture of Mexico is, is something that I deeply like. But I also noticed that the, there was just a, we were just in a different timeline here regarding to Bitcoin, let's say compared to Canada or, or the United States. In Canada, I, I did my startup in, in twenty twenty-one, that's when, when we, we transitioned to Bitcoin, but it was also around the time where regulations changed the, if you wanted to launch a platform for, for people To buy Bitcoin, you would have to pay at least a couple hundred thousands of dollars in, in legal costs. In Mexico, we're, we're talking way, way less than that, closer to even less than, than ten grand to have legal authorization to operate, a, a Bitcoin platform where people can buy and sell Bitcoin. So that was also the opportunity, right? Just legal costs. This is a less developed market, there's less competitors, the Bitcoin only narrative didn't exist when I came here. Now, now we're part of it and, and- Other companies are too, so I just saw this opportunity to, to not only personally enjoy more freedom during a time of, of, of such government control across the world, but also to just, try to develop Bitcoin in, in a new market. So, and, so that's what I've been doing. It's definitely been a ride and, and a big deep, curve of understanding how, how, how it, how culture and how people are different from, in Canada and the United States. The, the core- The whole lesson I got is that the strategies I pushed in Canada to, let's say, acquire customers to, to buy Bitcoin from our platform, or for other companies I worked at, those strategies didn't work here. Culture is very, very different, you know? So, well, I'm sure we'll get into that in tomorrow." }, { "speaker": "gustavo_flores", "time": "12:13", "start": 733.08, "text": "So I'm curious, let's talk about that. So what are some of the cultural differences you notice in Mexico?" }, { "speaker": "stephan", "time": "12:18", "start": 737.52, "text": "So the first thing I would tell you is that like libertarianism, as a culture, doesn't exist outside of the first At least in Mexico, it basically doesn't exist. maybe less than one percent of the population would consider themselves libertarians. You know, first of all, this country has a big left wing history and like big left wing institutions, so that has a big impact. But also, sometimes I wonder whether libertarianism is at heart an American or an English speaking, culture, thing, you know? So, so that's, that's the main difference. And so I try to get-- That's because that's how you would get people to jump on Bitcoin In Canada, for example, right? In the US, it's like, it's often you-- those people are, will get it because they're closer in that sense, right? So that has been, I would say, a, a core, a core thing. Also, just the online presence, you know, people aren't so tribal about, online activities as they are in, in Canada and Un-un, US, you know, it's like, they, you, I, I haven't seen any co-- Bitcoin or crypto or company to develop Or, or revenue through, like a online community that relates also to political values, you know, how, how, how it's like, \"Oh, we're, we're, we're Bitcoin only libertarian company, we're like freedom fighting company,\" doesn't seem to really work here. People don't seem to, to care about that more, more than that. So, so, so yeah, let's definitely-- And, and also, for example, if you try-- Also, the, the biggest difference is how Mexico is a third world country and it has, it, it A non official caste system, you know, where a lot of most people are, are like, just poor, and some people are middle class, and, and, and very little are upper class, and they all have their distinct way of working and their, their separate cultures, you know, so it's, it's a con-- it's a more, it's a social class culture system, where you would pe-- people behave in different ways depending on, on where they're at in, in the social scale, right? So, so, and that's very, very different from Canada where, where everybody's like middle class and, and doesn't disting themselves through, through these, through these classes or these behaviors." }, { "speaker": "gustavo_flores", "time": "14:37", "start": 876.59, "text": "Interesting. So you would say parts of the Western world almost have a more, quote unquote, egalitarian mindset in kind of the way they view themselves, even if, look, yeah, in practice there is still kind of a richer upper class and a poorer lower class and so on, but they at least present an attitude of egalitarianism, whereas I guess you're saying in Mexico it's kind of a little- There's not as much of an e-explicitly egalitarian sentiment, let's say, people just kind of, sort of openly accept different classes, let's say." }, { "speaker": "stephan", "time": "15:07", "start": 906.52, "text": "100%, you know, like obviously the government will, will never admit to that and will always try to, to pretend that Mexico's becoming first world and, right? But, but 100%, like, and, and that's probably, something that, that shocks you if you're, you're, you're not used to it. I grew up in Peru, so I kinda had that experience as a Told me about it, but it's, but it can definitely shock you and, and then you can understand, okay, actually, let's say if I have a product or if I wanna talk to people about Bitcoin, it's extremely different how I would relate it to, to, to people, even per social class, but also per region, Mexico is an extremely regional country where you have, even, even ethnically, it's, it's extremely diverse, you know? So, so an extremely, distributed form of society where, where people are, are very And depending where, where you go, even from a, from a neighborhood to another, right? So, so I think that, that is a core lesson and, to-- if, if you wanna understand how to like bring Bitcoin here, I think that's, you, you should start by understanding that." }, { "speaker": "gustavo_flores", "time": "16:11", "start": 970.7, "text": "Yeah. And just looking at some basic stats as well. So, GDP per capita of Mexico is about thirteen thousand dollars, so, you know, to, off the top of my head, I think that's like, let's say twice as rich as El Salvador" }, { "speaker": "gustavo_flores", "time": "16:27", "start": 987.09, "text": "Have some form of savings, but among those, it's, it might be more like one biweekly check, only ten percent have savings more than three months of expenses. So that's kind of, I guess that's what you're working with, right, when you're trying to obviously get people to adopt Bitcoin, at least on the SOV store of value side of things. So can you talk to us a little bit on that side of things, I guess most, I presume then, because you're doing a Mexico, Mexican Bitcoin exchange, you're kind of handling, let's say One have savings and have enough savings that they can start really taking Bitcoin seriously." }, { "speaker": "stephan", "time": "17:03", "start": 1022.92, "text": "Definitely. So, I mean, I think you touch on very good points there. I, I would start with a stat that really shook me when I came here. Maybe it's, it's evolved a bit, but when I checked, when I wrote a piece on this, three years ago, it was only three percent of households in Mexico that had any sort of financial instrument at all, which we, you mean stocks, bonds, crypto, you know, any, any- form of, of financial instrument. You compare that to the US, where more than fifty percent of households have direct stock ownership, and I'm not talking about, like pension, plans, right? Like, yeah, Mex-- most, half of Mexicans in the, in the workspace have pension plans, and yeah, they have stocks through that, right? But I'm talking about direct ownership. so, so that, that is a, a stat that shook me and it's like, okay, actually, not only the top of society actually owns, Like stocks or, or bonds. So I would say, in our experience, we've mostly interacted with people that are upper middle class, and upper class because those are the people that have the disposable income to, to invest. Those are the people that are thinking, about the-- that have the time to even think about the long-term horizon of their, their finances, you know? The mo-- most people are just working day to day trying to, trying to survive. So, and, and it's very understandable, right? So, so that, that has changed definitely. We're going under a, like a financialization of the country that is related but also unrelated to Bitcoin. there's like a fintech boom as well, you know, a credit access boom. So, so I, I think we're also in a, in a, in a crucial moment in Mexico's history, and this applies to many countries in Latin America and in the Third World, where financialization is finally happening, you know, people are getting banking access, and this is very much happening through like crypto platforms. To be honest, like Bitso in Mexico has between six and nine million users, which makes it the biggest, fintech platform or the biggest investment platform in the, in the country. So, just, just a crypto platform became the, the place where most people invest in, and now recently, let's say they've, they've launched stocks because they're like, well, we have more c-custmers than the banks do for their stock products, so we'll just launch stocks too. Interesting. So that, that, that'll always" }, { "speaker": "gustavo_flores", "time": "19:29", "start": 1169.49, "text": "happen. I guess that is like, they're kind of going the whole RWA style, eventually, who knows, maybe they're gonna do that kind of thing. but, yeah, it's interesting. I'm also curious to get, like, you've been in Mexico for a few years, I'm curious when you talk to people, just like everyday people If they do save or invest, I pre-- like, is it typically like fixed deposit in the bank? Is it stocks? Is it trying to get property? Is it, you know, gold? Is it, you know, obviously a small percent in Bitcoin? Like, what, what is like a typical thing that people would do? Is it just like fixed deposits? Is that what-- is that where their mind naturally goes?" }, { "speaker": "stephan", "time": "20:04", "start": 1203.52, "text": "Very good question. And once again, it depends who you're talking to, where they are at in, in society, you know? So fixed deposits are very interesting for people in I, I, I'm not exactly updated on the latest, central bank rate, but I think it's around eight percent. So if you're talking about central bank interest rate that's eight percent, private lending starts at twelve, you know, even goes to twenty. So you can, there, there's many financial, there's products that will give you like a twenty percent rate, and it's not considered high risk, you know, so, and that's, that's also a, a big question to ask ourselves as Bitcoiners, is like, we're not fifty percent annual rate for Bitcoin, it's like, well, that doesn't seem that high for them, right? Because they're used to, to high inflation, to high interest rates. so that's-- I would say that's real estate and, and like bonds or, or just, Those type of notes in general, that's like a very common, portfolio for most Mexicans, at least middle class and, and up. then once you get to the, to the higher thresholds of society, those are the people that actually own the operating companies in Mexico, so most of their wealth is attached to just, operating companies, mostly in private markets. Mexico is only has about ten, fifteen percent of its, like companies in the stock market Compared to Brazil or Chile, which have more than fifty, so all very concentrated in private ownership, not publicly traded, and a lot of the wealthy also have, like it's estimated to have about half of their wealth outside of the country, and this probably has been a trend since Mexico had, you know, hyperinflation and like bank runs and even funds confiscations in the eighties, in the nineties, so the wealthy are protected but just keeping their assets in the US in, in, in some other, like tax optimized, locations. But, but yeah, so this and also if you talk about just the general Mexican population, a lot of cash holding just under the mattress cash or a lot of informal schemes," }, { "speaker": "gustavo_flores", "time": "22:20", "start": 1339.63, "text": "right, so cash in hand sort of stuff. Informal" }, { "speaker": "stephan", "time": "22:22", "start": 1341.53, "text": "schemes where like, let's say, ten people will just loan each, like one of them is the custodian of, of their, their, of their savings, you know, a lot of, a lot of, of Unformal stuff, to, to be honest." }, { "speaker": "gustavo_flores", "time": "22:34", "start": 1353.68, "text": "Interesting, yeah. and then, yeah, as you said, so if the central bank rate is like eight percent and private lending starts at twelve percent, and, just out of curiosity, I was looking up like, okay, what's like a typical debase rate there for like Mexico M2 basically? What is the typical rate for that? And guess what? It's around twelve percent or eight to twelve percent. So it's like a lot of these people think they're investing, but they're actually either losing pace or just, if Even against actual fiat debasement. And I think that's part of our challenge as Bitcoiners is, is to obviously we go-- we have to go out there and try to educate people so they understand, well, you're still losing money, right? Like you actually need to hold Bitcoin so that you don't lose money, right? Totally." }, { "speaker": "stephan", "time": "23:17", "start": 1396.73, "text": "I think, I honestly that was a shocker too. I, coming from Canada, I, I thought that Mexicans would be more aware of their recent history. you know, they had a hyperinflation crisis twice in the last forty years Other populations, but in general, not at all, p-people have no conscience of, of these terms. And I mean, people, most people are, are-- These are complicated things, right? Even to understand how a central bank and, and fiat currency works, but, but definitely a lot of work of education to do on that front, you know? And, and that's, that's what, what, we've been, been, been trying to do a lot. but the Mexican peso has also had a very strong, past like six years. It" }, { "speaker": "stephan", "time": "24:02", "start": 1441.54, "text": "The exchange rate with the US dollar, six years ago, it's basically at the same price. it has gone up and down since. Oh, interesting. But that has been, an, a core part of, of, of this framework to understand is that the Mexican peso has actually always been unstable and is now recently stable, so that shifts people to like, actually, currencies, issues aren't, aren't, aren't, aren't not much of my concern, you know?" }, { "speaker": "gustavo_flores", "time": "24:25", "start": 1465.03, "text": "This episode is brought to you by CoinKite, the makers of my favorite" }, { "speaker": "gustavo_flores", "time": "24:32", "start": 1471.58, "text": "Too hard, but it's really about taking responsibility for your Bitcoin wealth and understanding that self custody gives you a true feeling of liberty. The Cold Card Q has a full keyboard and big screen, it's got two secure elements and a true air gap, allowing you to go fully airgapped using QR codes from seed generation to transaction signing. You can power the device using three triple A batteries, so you don't even have to plug it into the wall for power. You can easily use it with Sparrow Wallet for PC or Nunchok on mobile, and you can dial it into the right level of security and" }, { "speaker": "gustavo_flores", "time": "25:02", "start": 1501.56, "text": "Just use twelve words and single signature. If you want passphrase, it's easy. If you wanna add multi-sig or co-signing features, you've got those too. So go to coinkite dot com, use code livera to get ten percent off on your cold card or other devices and level up your self custody today. Interesting. Yeah, so I guess maybe one way to think of that is just like the Mexican, monetary authorities and government have just been relatively less, you know, irresponsible compared to the past, because they've, they've at least, they're holding, at least the peso is holding roughly against the dollar. So I guess, yeah, I loosely speak, even though overall, yeah, there's a lot of inflation and everyone's getting debased, it's just relatively not as bad as it was before, I guess, which is kind of Funny. but yeah, I mean, give us a bit of an overview on Aureo. what's like the goal? As I understand, it's like a Bitcoin exchange. Are you targeting more for the high net worth or are you just kind of in every, for everyone, whoever? and give us a bit of an overview, what is the service offering there?" }, { "speaker": "stephan", "time": "26:02", "start": 1561.83, "text": "Definitely. So I would say Aureo is a bit of a revival of the Verify platform we, we had in, in, in Mexico with, with, in Canada, sorry, with a different approach. So our platform in Mexico, for, for investors and companies, we think that this country has been dominated for too long by crypto casinos and, and, and it's time that like investors are offered an alternative that not only like provides them a technical platform, technology platform where they can buy and sell and, and, and do other things, but also provides actually education and assistance, for that process, right? I think Latinos, we, we, we often- Of, most of our customers definitely come from the upper middle class and the middle class, of this country, but we've also seen just other people join our, our platform and, and it's open and we wanna provide like a premium experience to, to, to everyone. So, we, right now you can buy and sell Bitcoin, on Aureo, the sell is-- we, we used to be called Swapito, and our sell product like comes from, from, from those days. we're also licensed In El Salvador as a Bitcoin service provider, which allows us to do exchange and custody from El Salvador and, and to offer those services in Mexico as long as we also have the authorization to operate in Mexico, which we also do. so yeah, and, and the follow-up plans are to, you know, become a full-on Bitcoin platform similar to platforms like, like River or Onramp in the United States, where you can buy, sell, custody, even take a loan. the DCA, th-things like that, right? I think we've had a lot of, adv-advancement in Europe, in the United States for like a Bitcoin only vision, and this is now finally happening in, in other parts of the world. So, so I'm glad to, to be part of this journey." }, { "speaker": "gustavo_flores", "time": "28:03", "start": 1683.1, "text": "interesting, yeah. can you tell us a little bit about the El Salvador regulation process, the license there, and actually why you pursued that? Because you could just-- I mean, I'm curious, you could have just gone only for" }, { "speaker": "gustavo_flores", "time": "28:17", "start": 1696.55, "text": "That at all. Was there a reason for doing the El Salvador process as well?" }, { "speaker": "stephan", "time": "28:20", "start": 1700.13, "text": "Definitely. So Mexico doesn't have a Bitcoin license, it has, or it doesn't have any sort of regulations around crypto, Bitcoin. It only has, anti-money laundering or money laundering prevention law, and Bitcoin is considered, like a risky, like money laundering activity. So you have to register with the tax authorities and- And file monthly reports and share the data, right? That's what they care in the end. but it's not regulated as, as financial institutions are actually. The Central Bank of Mexico is extremely anti Bitcoin, and since two thousand and nineteen, has banned financial institutions from issuing, Bitcoin crypto products. So only, you can only offer like Bitcoin pro-- services if you're either a non-regulated financial institution or if you're a foreign institution. so for us, it was like we have the choice between being a fully Mexican company where Bitcoin is in our books, but it's considered, there, there's absolutely no regulations or even, i-it's, it's extremely unadvised to have Bitcoin in your, in your books as a, as a company in, in Mexico. So El Salvador was, was a great location, very affordable, very developed framework around this, also tax optimized, and it, it- It, it just makes sense for us, in, in Mexico to do that. Let's say also Bitso, which is the biggest platform, they have their financial institution, their fintech in Mexico, but once you open an account with them, you're actually in a contract with their Gibraltar big crypto exchange. and most companies, most crypto Bitcoin companies in Mexico, your, your counterpart will be a foreign entity. So yeah, so that's the reason why we chose El Salvador, wh-why we had to choose, a foreign country to, for, for our exchange and custody center, and El Salvador was just at the right time, one of the best options in terms of accessibility. And it took us about eight months, I would say, both process. It was, not as expensive, more expensive than I thought originally, and more complicated, but definitely we're- Talking way less than something, like Mika in Europe or, or, or, or a crypto platform, or what's coming in the US, right? So, so all, all combined together, definitely very accessible. I would recommend people to, to explore El Salvador as, as a jurisdiction for, for like a headquarters for an international operation." }, { "speaker": "gustavo_flores", "time": "31:01", "start": 1861.34, "text": "Interesting. Okay, yeah, cool. And so when it comes to, I guess, the Mexican landscape, how does, you know, Aureo compare with, let's say, the crypto casinos? what are the main differences that you would see?" }, { "speaker": "stephan", "time": "31:16", "start": 1876.19, "text": "Well, I guess the first one is definitely the, the narrative and the message, right? the crypto casinos across the world, it's always about the next coin, the next meme coin, right? Or, or taking money from, from people, people that are developing coins to launch their coin. So it's always about, m- Scamming people, to be honest. and, and yeah, they provide a strong platform and they also have, like good products and it's definitely a, a good product, but the narrative, the message is the main difference. I would also say that our platform is optimized for Bitcoiners. So for example, our, our sell product, which was the, the Swapito product, it's optimized for people that live on the Bitcoin standard, that spend Bitcoin, on a daily basis. So you don't have to, yeah, you could do the same thing on a crypto casino, but you would have to trade, like deposit qu-- Bitcoin trade, withdraw, you know, just ten, twenty steps that are, for us, it's just like, three hundred pesos, create order, pay from Lightning wallet, boom, money arrives in the bank account within ten seconds, right? And for the buyer right now, we-- it's, it's, it's, it's not our final product, but we're also thinking in a similar way, right Enter a Bitcoin address, send pesos within thirty seconds, money's in your, either on the, on the mempool or in your Lightning wallet. You know, so, so we optimize for, for Bitcoiner experience, we drive a Bitcoin only message, and we also want people to, to-- We also push a lot of educational content, or, or, and, and community projects, such as being part of the community in Mexico City called La Casa Satoshi, where we host monthly meetings Meetups in, in Mexico City and, and, and a lot of, other, other projects like that. So I would say that's the difference, the, the message, the focus on education and community and the, experience optimized for Bitcoin." }, { "speaker": "gustavo_flores", "time": "33:20", "start": 1999.64, "text": "Yeah, interesting. And I guess you, you being more closer to the technical side of things, you might be more interested to do some of the more, let's say, Bitcoin advanced technical things as well, like in the future maybe that means things like, you know, BOLT twelve and BIP three fifty three and Lightning stuff like that And ways that like the payouts can be done in a way that's more, let's say, Bitcoiner, techie, savvy way instead of where like, this is something I noticed in like the crypto casinos, where they sort of, they might, maybe even they offer lightning, but it's just not done in a slick way, and the UX is like not that nice. And this is, this is a tendency that I've noticed, whereas like, like the Bitcoin Maxi type companies, they sort of focus more on that, so that could be interesting, for people too." }, { "speaker": "stephan", "time": "34:02", "start": 2041.98, "text": "Totally." }, { "speaker": "stephan", "time": "34:07", "start": 2047.01, "text": "Is running a startup, it's all about prioritization. And I, I'm a, a realist in the end, you know, I do, I, I, and I, I would recommend people like Bitcoiners to be more aware of what's happening in, in, at least when you run a business, to be more aware of what's happening in the crypto world, and also to meet customers where they are, you know, the reality or, or the technology is where they are, right? It's like, yeah, I could launch both twelve tomorrow, but nobody would There, and the technology meet so that, that, that the timing is right." }, { "speaker": "gustavo_flores", "time": "34:41", "start": 2081.03, "text": "Yeah, also a fair position to take because, you want, you know, as many-- You want a, a decent, percentage of the users to actually be able to use it. but, interesting. let's talk a little bit about, La Casa de Satoshi. So you've got this, physical Bitcoin community space, as I understand, you've got like- well, tell us a bit about that, like what are you offering there, what, what's going on there?" }, { "speaker": "stephan", "time": "35:02", "start": 2102.06, "text": "For sure. So I was very lucky that once I launched my, my startup in Mexico, I had some friends that were actually opening a Bitcoin physical space. So, a-and it all happened around the same time, late '24. like I said, Satoshi is a physical space in Mexico City where we make events twice, at least twice a month. generally we have our Bitcoin bid defs at the end of the month Month where we cover more advanced topics, I'm the host of that meetup, but we also have more like networking and one-on-one presentations where, the general public is invited to. we ha- it's also a co-working space during the day where I and my coworkers at Aureo, we work there every day, and, the other, other Bitcoin startups like Cardashev, which is a mining Bitcoin project in, in Mexico, they also work there, right? So, so it's both, I would- Compared to the, the space in Denver, or even Bitcoin Commons, you could say in, in, in Austin, where it's both a co-working space where projects get built, like it has the, like the event space where that, that happen every month, but also like digital communities, and, and digital presentations as well. So, so it's, it, it, you know what's, what's, what's really cool about this is also that there used to be a bar in Mexico City called the Bitcoin Embassy Bar, and it was open for about five years, but it shut down one month before like S Satoshi opened. So a lot of the community that was going to those events, participating in that community, they just shifted to like S Satoshi, and we kind of continued their, their, their mission. And Lorena, who was the founder of, of Bitcoin Embassy Bar, is also part of our community, and a good friend of us. So I think we, we also came at the moment, where all Other Bitcoin communities were, were launching across the country. So when I got to Mexico in twenty twenty-one, I couldn't find one Bitcoin community in the whole country that wasn't, that was Bitcoin only, Bitcoin first. it was, there were like crypto communities or inactive projects. And ever since we've launched in, at La Casa de Satoshi in Mexico City, in Guadalajara, Chris Guerra and, and Super Testnet, they lead a, a developer meetup, in Medida, they also have a- like a medica community or multiple communities. So all communities, communities are popping around the country. The, the, I would say the Bitcoin only movement is finally happening in Mexico, and we're just very glad to, to be part of it." }, { "speaker": "gustavo_flores", "time": "37:37", "start": 2257.39, "text": "Yeah, interesting to see how, like you see, you sometimes you see And it can really matter based on having the right person who just leads it. Like sometimes you just need someone who's just like got that energy about them, who just wants to like make it happen. And then, you know, when that person leaves that community or whatever, it sort of falls apart a little bit, so it kind of does require, you know, a few really talented or really passionate individuals who are really just gonna keep going and keep, keep meetups and events going, but, that said, what, once you see that, and in other countries, it's like once you sort of have one really good, you sort of plant one really good flag and then other ones can sort of come up around that as well, but, what, what has been your experience there on the kind of Mexican, let's say, Bitcoin only movement? Are you starting to see, like, okay, here's another example, what about like- Mexican, you know, Bitcoin, whatever, podcasters or influencers or whatever, are you starting to see more of that or not as much? Like, what's your experience there?" }, { "speaker": "stephan", "time": "38:40", "start": 2319.5, "text": "Definitely starting to see more of that. I would tell you, I would, and, and this is like by no means, a disrespect to, to Mexicans, but I would tell you that a lot is driven by, by foreigners. I personally am a foreigner, the, the guys in, in Guadalajara too, in Merida too, a lot of them are foreigners. So, so, but, but, but also there, I would, I would say it's, it's half and half, right? Like half, We had actually Paco de la India, maybe you've heard of him. Oh, yeah, yeah, I know Paco. Paco from India, he was like run, run with Bitcoin, and he came to Mexico, and we did a tour with, he actually stayed in my house, and we did a tour of like five cities, we did meetups all over the country, and like say in Puerto Vallarta, it was only Canadians, you, no Mexicans came to that meetup, but when we went in, in like thirty-five year old Canadians, when we went to San" }, { "speaker": "stephan", "time": "39:39", "start": 2379.38, "text": "Like, sixty-five and plus Americans. But then when we did a meetup in Mexico City, I was like, \"Oh no, here it's actually mostly Mexicans,\" and another city too, right? So, so Definitely a lot of, a big shift has happened, over the past few years. We've, we have way more, people that are creating content, that are launching companies. Now there's about four Bitcoin-only companies in Mexico, or maybe even five. and every year there's, there's new ones being added. so I'm, I'm optimistic. However, I would add that we-- the people in Mexico aren't there yet. It's not like there's been A platform that has figured out how to acquire hundreds of thousands of users or millions of users like, like Swan or River or Strike did in the United States, you know? So, so that's what we wanna do. We, we really wanna, you know, iterate until we find the formula that actually gets Mexicans interested in, in, in this vision, that I think we, we haven't resolved for it yet, but many of us across the country are working, on different projects to arrive there. Interesting." }, { "speaker": "gustavo_flores", "time": "40:51", "start": 2451.42, "text": "Yeah. And it's a good point you raised about expats contrasted with locals as well, because, yeah, maybe it is, maybe some of your customers will actually be expats who live in Mexico, but maybe they aren't actually Mexicans. So that, that could also be an interesting thing where you end up selling to a lot of expats, at least at the start of your journey, and then maybe over time, you, you find, you kind of crack the code on reaching the locals." }, { "speaker": "stephan", "time": "41:13", "start": 2473.24, "text": "That has been a lot the case, in, in Tlalpan, Many expats as customers, many already existing Bitcoiners in, in Mexico. We, yet we haven't yet cracked the code on, on how to convert like no-coiners to, to become, Bitcoiners or even like crypto people to, to become Bitcoiners, which I, I think will happen with time, but definitely a lot of expat, like the big expat market here, definitely taking, taking place." }, { "speaker": "gustavo_flores", "time": "41:48", "start": 2508.04, "text": "Interesting, yeah. now I know you got- You guys did a raise with, early riders. so tell us a little bit about that, and I know, you know, I did an episode a little while back with, Michael, from Onramp, and we were ta-we're talking a little bit about that, and what I found interesting with early riders is it's like they're trying to be Bitcoin denominator, or Bitcoin is the hurdle rate, right? So, can you talk a little bit about that raising f-with, early riders and this Bitcoin hurdle rate idea?" }, { "speaker": "stephan", "time": "42:16", "start": 2536.0, "text": "Definitely When he was working at Unchain and I was, I was at Verify, so, I mean, we, we didn't keep touch, but once I got, through an introduction, I, I, I started talking with these guys, was like, \"Ah, I, I remember you, Gustavo, you know, from, from those days.\" so I guess that, that helped a bit. I, I think the, the hurdle rate vision is, is very important, you know, because, not only we're like Bitcoin has shifted how, how, how investment works, but I also think AI has shifted how, how we, how productive we are, right? And it's like, if you can, if you don't have a team that's like maximizing its productivity, chances are you will never be able to outperform Bitcoin. so for us, it's, it's very important that we stay lean, that everyone in our team maximizes its productivity with, with, with technology and, and, particularly AI, which I think is strong Powerful. So, a-and I think that, that like, that would be my addition to the Bitcoin as a hurdle rate. It's like invest in startups that know how to maximize their productivity to be actually able to outperform Bitcoin. so I think, I do agree with other thesis that the, the shift, maybe they're, maybe we're still in the fiat era for a couple of years, so most con-most people won't, won't behave this way, but, but I think it's, it's wise to prepare for, for the Bitcoin, era and, Where, where this is gonna work this way. So they invested ten Bitcoin, on our, on our, on our company, we hope, we're, we're pretty sure we'll be able to, to, to outperform that. we, we, the, the multi-institution custody vision also impacted, how, how we see access to, to, to Bitcoin custody, you know, it's, and particularly related to Latin America. So I would tell you that A lot of the concern has been, for, for Mexicans to like, why would I buy Bitcoin, if I might lose it, if it might get stolen from me? how can I even make sure it's, it's secure? So I, I, I like the multi-solution custody balance that, that it doesn't, it doesn't have a single point of failure. it even became recommended in like a Bitcoin Policy Institute, re-report they did where they recommend state treasuries to adopt this, this protocol cust-custody strategy. So we, we wanna integrate with the on-ramp, API, w-w-once it's, fully, settled and fi-and, and, and stabilized, we wanna integrate it directly on the platform so our customers can, can buy, Bitcoin and then hold it through, through the secure f-systems and, and directly on our platform, right? So it came a lot, the, the on-ramp relationship was a lot of, the, the, the early, like the early writers' relationship, sorry, was I think we, we kind of have shared a similar product vision, but also, just a general investment thesis vision, plus, we, we're kind of becoming friends too. So, so it all, it all made sense, in the end. And they, I think they were also looking for, for s- to, to expand their horizon be-be-beyond the United States. They, they have like Onramp Mina, as a portfolio company in, and Aureo De Righ is focused in the Middle East. So," }, { "speaker": "stephan", "time": "45:41", "start": 2740.55, "text": "I think In some ways." }, { "speaker": "gustavo_flores", "time": "45:44", "start": 2743.55, "text": "Interesting, yeah. And then, yeah, as you mentioned, you're kind of touching on the on-ramp, multi-institution custody thing. So, I mean, I've had an episode with Michael for listeners who are interested in kind of a deeper exploration there. but, it seems to be a common, maybe it's like a baby step for a lot of people who are obviously, maybe they're not ready for the full self-custody journey, and, you know, I, I can understand where maybe like" }, { "speaker": "gustavo_flores", "time": "46:13", "start": 2772.75, "text": "But they want some of the other things that can kind of come alongside this aspect of it, because they want like a pro level custodian, but they want maybe inheritance or some other aspect of it to be kind of handled or at least assisted through that process. but, Yeah, okay. so I think those are kind of the key points that I was keen to, discuss with you. Anything else that you think we didn't, mention or any, closing thoughts on, you know, Bitcoin in Mexico?" }, { "speaker": "stephan", "time": "46:41", "start": 2800.86, "text": "Definitely. So I mean, I think people should, come to Mexico if, if you're interested in, in this experience, like as a Satoshi, I, I think everybody would be impressed of, of the quality and, and the community we're building, in Mexico City. There's also a Merida, which is in the southern part of Mexico, close to Cancun, in December, in about a month, Mayan Bitcoin Conference, we're gonna be there. I also think that will be like a good point of reunion for all communities a-across the country. And, I would tell people to, to be more o-open minded about how Bitcoin will be adopted across the world. there's, it will, it will definitely not be the same way it has been adopted in United States, right? Because cultures work differently, Society or even socioeconomic systems are, are made differently. so, so that's, that's-- and, and that has been a big lesson for me, right? So I, I talk about it from, from a, from a humble point of view where, where I was humbled by that experience, and I wanna advise people to, to be open about that. but yeah, if, we-- please follow us, to, to stay updated on, on, on everything we do. we have a lot of stuff coming up over the next few months" }, { "speaker": "gustavo_flores", "time": "47:59", "start": 2878.86, "text": "And, what's the website for Aureo just for people who are listening?" }, { "speaker": "stephan", "time": "48:02", "start": 2882.1, "text": "Aureobitcoin dot com. Excellent." }, { "speaker": "gustavo_flores", "time": "48:04", "start": 2883.94, "text": "Okay, well, yeah, links in the show notes and, yeah, thanks for joining me and, yeah, good luck with it, Gustavo. Thank you, and I'll see you around. Thank you." } ] }