More Dominicans using the cryptocurrency market

Ana Bernier has been receiving benefits for a year as a return on the dollars she invested in the virtual market for the use of cryptocurrencies. She is one of the Dominicans who use digital platforms for buying and selling intangible assets, a segment that in the country has grown 52% this year, according to a recent survey. The Central Bank reiterates that it does not have the regulation and support of the State.

It did not take Bernier, 53, long to make the decision to become an investor in digital assets, since the experience of a friend who generates higher volumes than her motivated her to take the risk of placing her money in the market, through an international company.

“I started with $50 and then reinvested what I had. Now I withdraw my profit weekly in an ATM where I have the option to sell my coins and receive payment in pesos.”

Cryptocurrency is a digital currency that uses cryptographic encryption to ensure the integrity of transactions and asset transfers through technological means. There are many virtual currencies and each one has a different value and with unique code that differentiates it from the others, so two people cannot have the same cryptography (code) in their currencies.

In the country there are already 15 ATMs for cryptocurrencies in different locations; more than half are installed in commercial points in Greater Santo Domingo, specifically in Villa Mella, San Isidro, Los Mina, Piantini, Gascue, Bella Vista and Herrera.

The rest are located in other provinces. There is at least one ATM in Santiago, San Pedro de Macorís, Puerto Plata, Las Terrenas and Punta Cana, areas where foreigners and Dominicans use the coins for payments and transactions.

Transactions are digital assets that are made without intermediaries and users can make exchanges with the amount of coins they want to have in their digital wallet.

Bernier’s objective for investing is to pay the debts he had in the long term and to guarantee his son the coverage of his university studies. In contrast, Anderson Peña has a riskier profile. He uses the virtual market for higher yield investments to change his lifestyle and finance small local businesses.

Despite the risks involved in investing money in a non-tangible currency and whose origin is unknown, the most recent New Payments Index 2022 study, published by Mastercard, shows a 52 % growth in the use of cryptocurrencies in the Dominican Republic in the last year.

The study indicates that 74 % of consumers in the Dominican Republic surveyed would consider switching or continuing with a banking entity that allows them to invest in cryptocurrencies.

“Virtual assets are not legal tender and therefore do not enjoy the backing of the State; their effectiveness or their use as a means of payment in our economy cannot be guaranteed”
Central Bank

Formalization

The Dominican Association of Fintech Companies (AdoFintech) has registered two cryptocurrency exchange-type companies (exchange platform) that use technology to automate and facilitate financial processes.

Among them is Bitpoint Latam, a foreign company that offers the services of buying and selling coins in the country, and the second is BitcoinRD, the only Dominican Fintech that has more than 90% of the digital ATMs installed in the country.

“The issue of cryptocurrencies in the country is a bit slow, while other countries have already begun to include the virtual market as a segment of the digital economy,” considers Giuliano Simó Marra, founder of BitcoinRD.

The entrepreneur tells Diario Libre that at the international level many advances have been achieved that also benefit the regulatory bodies, prioritizing the use of currencies as an investment mechanism and for trading.

He regrets that in the Dominican Republic the sector is not taken into account, since – he understands – it has “great potential to attract tourists” who use this method of payment of global reach in real time. “It is the future of finance and business,” he assures.

“Bitcoin, the most popular cryptocurrency, registered a drop in value, going from more than $67,000 for a Bitcoin in November last year to $20,000 in June this year.””

Still unregulated and at one’s own risk

Cryptocurrencies have been the cause of myths and controversies due to variations in their value with respect to regulated currencies such as the peso and the dollar, which is the currency in which they evaluate the value of digital currencies.

The Central Bank of the Dominican Republic, as the only issuer of banknotes and coins in the country, was consulted for its opinion on the increase of people investing their money in the virtual market. It reiterated its warning to the population and financial intermediation entities about the risks associated with this type of asset.

“Virtual assets are not legal tender and therefore do not enjoy the backing of the State; their effectiveness or their use as a means of payment in our economy cannot be guaranteed. No person is under any obligation to accept them as a form of payment for goods or services rendered,” he insisted.

In countries such as Brazil, Peru, Ecuador, Colombia, Chile, Panama, Venezuela and Argentina, among others, the private use of digital assets is allowed and, in fact, the authorities have taken some steps to regulate their use and prevent money laundering.

Meanwhile, in Bolivia, China, Egypt, Nepal and Algeria, among others, it is illegal to buy, sell or trade digital assets.

The only countries that have declared open and regulated use of cryptocurrencies for the purchase of goods and payment of services are El Salvador and the Central African Republic, where the authorities decided to admit Bitcoin as legal tender.

Among the main risks of digital assets are their volatility, the informality of operations that do not allow the user to determine the location or identification of the issuer of assets and the dependence on the Internet to carry out transactions.

Bitcoin, the most popular cryptocurrency, recorded a drop in value, going from more than $67,000 for a Bitcoin in November last year to $20,000 in June this year. A variation changes the “rules” for exchange and trading.

Similar drops were recorded with the Ethereum coin, which went from being worth more than $4,800 in November 2021 to less than $1,000 in June this year. In the case of Dogecoin, it went from 33 cents in August 2021 to five cents last month.

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