Mexico is actively investing in innovation acceleration programs and incentives to set the foundation for the next wave of economic growth and job creation. The success of such programs depends to a large extent on where the focus (capital, human and policy) is placed. Mexico has a unique opportunity to capitalize on blockchain capabilities to streamline government services, create new private sector jobs and empower its citizens.
Mexico—like Singapore and Dubai—is actively investing in innovation acceleration programs and incentives, including public-private partnerships (PPP), as a way to set the foundation for the next wave of economic growth and job creation.
While most people are familiar with the wave of innovation and startups leveraging mobile commerce (e.g., ApplePay, Starbucks), social networking (e.g., Instagram, Twitter, Facebook), cloud computing (e.g., Amazon Web services, Salesforce.com) and the sharing economy (e.g., AirBnB, Uber), few are aware of the disruptive power of a new wave of digital capabilities enabled by cryptocurrencies (e.g., Bitcoin) and its underlying distributed ledger technology, blockchain.
The potential for transformation in both private and public arenas is so important that since the blockchain emerged in 2009, we’ve witnessed the creation of over 800 cryptocurrency/ledger startups and the investment of over $1 billion in the form of venture capital funding. Marc Andreesen, the famous Silicon Valley venture capitalist, is one of the earliest and most supportive investors
Simply put, the blockchain is a distributed ledger system across millions of nodes; imagine a list of transactions copied onto millions of computers around the globe. Every time someone buys a new car or transfers money to another, a new transaction is added to the ledger and added to all copies of this ledger worldwide making it nearly impossible for anyone to add false entries to the system. Most importantly, the system is self-policed without the need for a third party like a bank, custodian or escrow agency to monitor it.
The applications enabled by the blockchain are numerous and include several that should be of interest to corporations and the government in Mexico:
- Cheap and reliable remittances (cross-border payments)
- Low fees payment system for e-commerce and m-commerce (mobile commerce)
- Reliable and transparent way for the government to distribute social payments
- Provision of financial services to the unbanked
- Efficient registry for all forms of assets from homes and cars to designer bags
- Reliable asset-tracking mechanism for transportation, energy and manufacturing companies
- Peer-to-peer crowdfunding for startups and small- and medium-businesses (SMBs)
- Intellectual property monetization and content sharing mechanism for private sector and universities
- Mechanism for the creation of straightforward, self-enforcing contracts
These are only a few examples intended to provide a sense of the breadth of potential applications.ii
The success of any innovation program depends to a large extent on where the focus (capital, human and policy) is placed. Mexico has a unique opportunity to capitalize on blockchain capabilities and in doing so, can streamline government services, create new private sector jobs, and empower its citizens
In October 2014, Mercado Libre Mexico, a Mexican eBay subsidiary and Mexico’s largest e-commerce platform with over 100 million users and seven million unique sellers, began to accept bitcoin payments. Other companies such as Volabit and Pademobile are accepting bitcoin for utility and phone bill payments although the Bank of Mexico has issued a restriction on financial institutions in dealing directly in Bitcoin
