In this conversation, Stephan Livera interviews Gustavo Flores, the CEO and founder of Aureo, a Bitcoin startup in Mexico. They discuss Gustavo’s journey in the Bitcoin space, the cultural differences he has observed while building in Mexico, and the unique financial landscape of the country. The conversation delves into the challenges of educating the Mexican population about Bitcoin and the various investment trends that are emerging in the region. 

Gustavo Flores also discusses the evolution of Aureo, a Bitcoin exchange in Mexico, and its mission to provide a premium, educational experience for investors. He highlights the regulatory landscape in Mexico and El Salvador, the differences between Aureo and crypto casinos, and the growing Bitcoin community in Mexico, including the establishment of La Casa de Satoshi. 

The conversation also touches on the challenges of raising capital and the importance of adapting to local cultures in the adoption of Bitcoin.

Takeaways:

🔸Gustavo Flores has a rich history in Bitcoin, starting from community involvement in Montreal.

🔸He transitioned from mining and investing to launching startups focused on Bitcoin.

🔸The Bitcoin community is diverse, with varying levels of technical understanding.

🔸Cultural differences significantly impact Bitcoin adoption strategies in Mexico.

🔸Libertarianism is not a prevalent ideology in Mexico compared to North America.

🔸Only 3% of Mexican households have any financial instruments, highlighting a lack of financial literacy.

🔸The wealthy in Mexico often keep their assets outside the country for protection.

🔸Cash holding is common among the general population, with informal savings schemes prevalent.

🔸The Mexican peso has shown stability, affecting perceptions of investment risk.

🔸Education on Bitcoin and financial literacy is crucial for broader adoption in Mexico. Aureo aims to provide a personalized service platform for Bitcoin investors in Mexico.

🔸The regulatory environment in Mexico is challenging for Bitcoin companies, making El Salvador an attractive option.

🔸Aureo differentiates itself from crypto casinos by focusing on education and a Bitcoin-only message.

🔸La Casa de Satoshi serves as a community hub for Bitcoin enthusiasts in Mexico City.

🔸The Bitcoin Only movement is gaining traction in Mexico, with more companies and communities emerging.

🔸Raising capital with a Bitcoin hurdle rate emphasizes productivity and efficiency in startups.

🔸The experience of expats in Mexico is influencing the Bitcoin market.

🔸Aureo’s platform is designed to optimize the user experience for Bitcoiners.

🔸The importance of understanding local cultures in Bitcoin adoption is crucial.

🔸Gustavo encourages openness to different adoption paths for Bitcoin around the world.

Timestamps:

(00:00) – Intro

(01:05) – Gustavo’s Bitcoin journey

(03:35) – Understanding the technical landscape of Bitcoin; Community dynamics

(09:44) – Why is Gustavo building a Bitcoin company in Mexico?; Cultural differences 

(16:12) – The Mexican financial landscape

(19:43) – Where do Mexicans invest their money? 

(23:15) – Mexican Peso debasement

(24:24) – Sponsor

(25:49) – What is Aureo?

(28:04) – The El Salvador advantage with regulations

(31:08) – How is Aureo different from crypto companies in Mexico?

(34:51) – What is La Casa De Satoshi?

(38:20) – The evolving Bitcoin movement in Mexico

(41:50) – Raising capital with Early Riders; Bitcoin is the hurdle rate

(46:30) – Closing thoughts on Bitcoin in Mexico

Links: 

• https://x.com/gustavojfe 
• https://x.com/AureoBitcoin 
• https://www.aureobitcoin.com/en 
• https://x.com/lacasadesatoshi 

Sponsor:

• CoinKite.com (code LIVERA)

Stephan Livera links:

• Follow me on X: @stephanlivera
• Subscribe to the podcast
• Subscribe to Substack

Transcript:

Stephan Livera (00:00)
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 going to get into a bunch of things. Now, Gustavo, I know you’ve had a bit of a history in various different aspects of Bitcoin. just for listeners, well, first off, welcome to the show. And do you want to just start with giving us a bit of an overview of your history in Bitcoin?

Gustavo Flores (00:30)
Certainly. Well, first of all, thank you, Stephan, for having me. It’s an honor to be here. I’ve been a fan of the show for so long I cannot even remember. And my story started when I was 20 years old, back in Canada where I grew up, in Montreal, Canada. I started being part of the Bitcoin Montreal community, which was one of the earliest Bitcoin communities in the world. We had a physical space in Montreal since 2013, 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 2019 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 a research and consultant firm where we would help customers do self-custody but it became a platform where you could buy and sell Bitcoin in 2021 and then

we started also we got acqui hired by bull Bitcoin

Where I worked along me and my teammates. We all transition to there. I worked there for about a year until 2022 After that, I wanted to dig in deeper into more technical stuff and like privacy related So I went to work at wasabi wallet. I was a technical writer at wasabi 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 pull requests of

the code bases and I’ve been doing that for the past year and I now launch in now a year already I’ve launched Swapido which has now rebranded to audio and I think we’ll get more into the details of that. So in in resume ⁓ 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 the companies.

Stephan Livera (02:34)
Yeah, it’s interesting. There’s so many aspects in that it’s sort of like, where do we even where do we 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 it’s kind of in the privacy world of it with coinjoin and wasabi stuff. ⁓ And then, yeah, I’m curious. I mean, from your work on Optech, right, which

For listeners, do recommend go and check it out. I can’t listen to every episode myself, but 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 may be a bit of a divide and not just kind of nuts and core stuff, but just generally that there’s kind of, I’m going to say branching of different communities in Bitcoin per se.

Do want to comment on that in terms of the technical world of Bitcoin?

Gustavo Flores (03:34)
you

Yeah, certainly. So I mean, I would say the first thing is that the more you learn about Bitcoin, the more you understand, the least you understand about Bitcoin, right? The more it becomes clear that there’s more to learn. So this is a whole rabbit hole, right? And to most people I talk to about what we write in Bitcoin Optech, they’re very, it’s many layers in depth of understanding, right? Like, for example, I cover pull requests related to changes in Bitcoin Core.

But to understand, like they say related to Strata and V2, but to understand that you would have to understand what’s the problem with mining decentralization today and why Strata and V2 is a solution to that. So then understand the technicals of how Strata and V2 work. So I would say it’s not, I would recommend everyone to do it, but also to just try to understand like a topic.

in detail, Like, okay, I don’t have to understand the whole newsletter. I’ll just start with this one on Strata and V2, this week, this month. I’ll understand how mining works, why this brings mining decentralization. So at Bitcoin Optic, we try to stay as like…

logical as possible, 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 the many issues that, many debates have happened lately, but.

you would, we really don’t want it to consume our time, right? We really wanna focus on the technicals behind Bitcoin, the news, the changing consensus. ⁓ So that’s what we’ve been doing and we haven’t really taken a side. most people I talk to about this are very open. It’s different in person than online as well. In person, I also present the Mexico City bid-devs and when I talk about this, everybody’s very open.

Of Bitcoin Optech is funded by Brink. Brink funds Bitcoin Core developers. If you don’t like Bitcoin Core developers, naturally you might not like the Bitcoin Optech crowd either. But that’s the way it is.

Stephan Livera (05:45)
Yeah, yeah. And I mean, yeah, to be clear, I wasn’t

saying like, give us your stance on Knott’s verse call kind of stuff. I just meant kind of broadly that there’s a bit of a disconnect, right? And I think maybe what I’m sort of getting at more is like this whole… Some people see it as like derogatory or whatever, but it’s like a funny term plebslop, right? Like, it’s kind of like this idea that there’s a whole bunch of people who…

Like they’re kind of following certain kinds of NGU or kind of engagement content, but 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 out there. I’m curious if you have any comment on that. Is that something you’ve seen?

Gustavo Flores (06:22)
It’s definitely something I’ve seen a lot. And I think that kind of culture shift happened around the time of 2020, 2021. I remember in Twitter, we used to have more technical discussions back then. I think the Twitter algorithm also had an interference in that culture shift, right? But it’s natural, as Bitcoin grows, it’s just normal that not everybody’s gonna be as technical. But I do recommend people 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 it the newsletter aspect you can just learn about Bitcoin topics I also recommend people to read mastering Bitcoin that has been one of the most profound Books that has transformed my understanding of it right, but but it’s it’s okay, too It’s normal that people don’t don’t have the technical Understanding of everything it was just bound to happen as as Bitcoin grew but

But it is something that we advise to all people. However, we understand not everyone will be able to make it, and that’s fine too.

Stephan Livera (07:30)
Yeah, and yeah, to be fair, not everyone is sort of full time working in 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 is difficult to kind of have the time to go and read all these things. Because, you know, we’ve got families, kids, and whatever else is going on in people’s lives. ⁓ It’s not that easy. But it just is a different. I would say 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 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, to me it’s bit annoying in some ways because it kind of

degrades the online conversations that we end up having.

Gustavo Flores (08:34)
I totally understand and I feel the same way. I think we should also explore other forums. Twitter is not the only Bitcoin forum there is. ⁓ If people want to have more advanced conversations, mean, delving Bitcoin a big source from where we get our content.

Stephan Livera (08:49)
Right, mailing lists,

delving Bitcoin and various places.

Gustavo Flores (08:51)
like this, know, IRC,

various places, you know, but definitely something that is annoying. It kind of became political in some ways, you know, it took a political turn, the whole Bitcoin culture. ⁓ But I don’t, I think it was always bound to happen.

Stephan Livera (09:09)
Yeah, yeah. So let’s talk a little bit about, because obviously you’re in Mexico, you’ve been there for a couple of years, right? Tell us a little bit about what you saw. Well, first off, why moving to Mexico and why building in Mexico?

Gustavo Flores (09:25)
Totally. So I am Peruvian. I was born there. I lived eight years of my life there, but I lived 17 years of my life in Montreal, Canada. And so most of my life experiences in Canada. 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, know, were they libertarians at heart? I think it was more like a tourist strategy. But I mean, I came here and I fell in love with the country. The culture of Mexico is something that I deeply like. But I also noticed that there was just a, we were just in a different timeline here regarding to Bitcoin. Let’s say compared to Canada or the United States. In Canada, I did my startup in 2021.

transitioned to bull Bitcoin but it was also around the time where regulations changed the if you wanted to launch a platform for people to buy Bitcoin you would have to pay at least a couple hundred thousands of dollars in legal costs in Mexico or we’re talking way way less than that closer even less than 10 grand to have legal authorization to operate 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 we are part of it and other companies are too. So I just saw this opportunity to not only personally enjoy more freedom during a time of such government control across the world, but also to just try to develop Bitcoin in a new market. So that’s what I’ve been doing. It’s definitely been a ride and a big

deep curve of understanding how culture and how people are different in Canada and the United States. The core lesson I got is that the strategies I pushed in Canada to, let’s say, acquire customers to buy Bitcoin from our platform or for other companies I worked at, those strategies didn’t work here. Culture is very, very different. So I’m sure we’ll get into that in the moment.

Stephan Livera (11:41)
So I’m curious, let’s talk

about that. So what are some of the cultural differences you noticed in Mexico?

Gustavo Flores (11:47)
So the first thing I would tell you is that libertarianism ⁓ as a culture doesn’t exist outside of the first world, in my experience. Or at least in Mexico, it basically doesn’t exist. ⁓ Maybe less than 1 % of the population would consider themselves libertarians. First of all, this country has a big left-wing history and big left-wing institutions, so that has a big impact. But also, sometimes I wonder whether libertarianism is

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 will get it because they’re closer in that sense right so

That has been, I would say, a core thing. Also, just the online presence. People are not so tribal about online activities as they are in Canada and US. I haven’t seen any Bitcoin or crypto or company to develop a following or revenue through an online community that relates also to political values.

where Bitcoin only libertarian company or like freedom fighting company doesn’t seem to really work here. People don’t seem to care about that more than that. yeah, let’s definitely, and also for example, you, also the biggest difference is how Mexico is a third world country and it has, it kind of follows a non-official caste system, know, where a lot of most people are like, ⁓

just poor and some people are middle class and very little are upper class and they all have their distinct way of working and their separate cultures. So it’s a social class culture system where you would…

people behave in different ways depending on where they’re at in the social scale, right? and that’s very, very different from how it works in Canada where everybody’s like middle class and doesn’t distinct themselves through these classes or these behaviors.

Stephan Livera (14:06)
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 you look 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 explicitly egalitarian sentiment, let’s say people just kind of

sort of openly accept different classes, let’s say.

Gustavo Flores (14:38)
100 % you know like obviously the government will never admit to that and will always try to pretend that Mexico is becoming first world and but 100 % like and and that’s probably ⁓ something that that shocks you if you’re not used to it. I grew up in Peru so I kind of had that experience as a kid or at least my parents told me about it but it can definitely shock you and then you can understand okay actually let’s say if I have a product or if I want to talk to people about Bitcoin it’s extremely

Stephan Livera (14:45)
Right.

Gustavo Flores (15:08)
different how it would relate it to people.

even per social class but also per region. Mexico is an extremely regional country where you have, even ethnically it’s extremely diverse, know, so an extremely distributed form of society where people are very different depending where you go, even from a neighborhood to another, right? So I think that is a core lesson. ⁓ if you want to understand how to bring Bitcoin here, I think that’s, you should start by understanding.

understanding that.

Stephan Livera (15:43)
Yeah, yeah, and just looking up some basic stats as well. So GDP per capita of Mexico is about $13,000. So, you know, off the top of my head, I think that’s like, let’s say twice as rich as El Salvador ish in that range. And I’m just a quick stat looks like 52 % of Mexican adults have some form of savings. But among those, it’s it might be more like one bi weekly check only 10 % of 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 Mexican Bitcoin exchange, you’re kind of handling, let’s say that top percent of people who one, have savings and have enough savings that they can start really taking Bitcoin seriously.

Gustavo Flores (16:37)
Definitely. So I mean, I think you touch on very good points there. I would start with a stat that really shook me when I came here. Maybe it’s evolved a bit, but when I wrote a piece on this three years ago, it was only 3 % of households in Mexico that had any sort of financial instrument at all, which means stocks, bonds, crypto, any form of financial instrument. You compare that to the US where more than 50 % of households

have direct stock ownership and I’m not talking about like pension plans right like yeah most half of Mexicans in the workspace have pension plans and yeah they have stocks through that right but I’m talking about direct ownership ⁓ so that is a stat that shook me and it’s like okay actually not only the top of society actually owns ⁓ like stocks 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 invest. Those are the people that are thinking about the, that have the time to even think about the long-term horizon of their finances. Most people are just working day to day trying to survive. And it’s very understandable, right? So that has changed. Definitely we’re going under ⁓ like a financial

Stephan Livera (17:35)
Yeah.

Gustavo Flores (18:03)
of the country that is related but also unrelated to Bitcoin. There’s like a fintech boom as well, know, a credit access boom. So I think we’re also 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 country. ⁓

just a crypto platform became the place where most people invest in. And now recently, let’s say they’ve launched stocks because they’re like, well, we have more customers than the banks do for their stock products, so we’ll just launch stocks too. So that’ll always happen.

Stephan Livera (19:00)
Interesting I Guess that is like

they’re kind of going to hell our WA 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 have you 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 Presume 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, know, obviously a small percent in Bitcoin? 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?

Gustavo Flores (19:37)
Very good question. And once again, it depends who you’re talking to, where they’re at in society. So fixed deposits are very interesting for people in Mexico because I believe I’m not exactly updated on the latest central bank rate, but I think it’s around 8%. So if you’re talking about central bank interest rate, it’s 8%. Private lending starts at 12, even goes to 20. So there’s many financial, there’s products that will give you like a 20 % rate.

and it’s not considered high risk. And that’s also a big question to ask ourselves as Bitcoiners. We’re not in a country like here, when you present, let’s say, 50 % annual rate for Bitcoin, it’s like, well, that doesn’t seem that high for them, right? Because they’re used to high inflation, to high interest rates. So I would say that’s real estate and bonds or just… ⁓

those type of notes in general, that’s like a very common portfolio for most Mexicans, at least middle class and up.

Then once you get 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 only has about 10-15 % of its companies in the stock market compared to Brazil or Chile, which have more than 50. So ⁓ very concentrated in private ownership, not publicly traded.

Stephan Livera (21:10)
Hmm.

Gustavo Flores (21:15)
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 hyperinflation and like bank runs and even funds confiscations in the 80s and the 90s. So the wealthy are protected by just keeping their assets in the US, in some other like tax optimized locations.

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 lot of informal schemes, informal schemes where like, let’s say 10 people will just loan each, like one of them is the custodian of their savings, know, a lot of informal stuff to be honest.

Stephan Livera (21:52)
Right, it’s all cash in hand sort of stuff, yeah.

Interesting. Yeah. And then, yeah, as you said, so if the central bank rate is like 8 % and private lending starts at 12%, and just out of curiosity, I was looking up like, okay, what’s like a typical debasement rate there for like, Mexico M2 basically, what is the typical rate for that? And guess what, it’s around 12 % or 8 to 12%. So it’s like, a lot of these people think they’re investing, but they’re actually either losing pace or just if they’re lucky, they’re kind of breaking even against actual

fiat debasement. And I think that’s part of our challenge as Bitcoiners is to obviously we have to go out 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?

Gustavo Flores (22:52)
Totally. think honestly that was a shocker too. Coming from Canada, I thought that Mexicans would be more aware of their recent history. You know, they had a hyperinflation crisis twice in the last 40 years. You think there’s more awareness about that? Maybe amongst older populations, but in general, not at all. People have no conscience of these terms. I mean, most people are, these are complicated things, right? Even to understand how a central bank and fiat currency works.

but definitely a lot of work of education to do on that front, and that’s what we’ve been trying to do a lot. But the Mexican peso has also had a very strong past like six years. It’s basically stable. Like if you look at its exchange rate with the US dollar six years ago, it’s basically at the same price. It has gone up and down since, but that has been a core part of this framework to understand is that the Mexican peso has actually

Stephan Livera (23:43)
interesting. Okay.

Gustavo Flores (23:52)
always been unstable and is now recently stable so that shifts people to like actually currencies issues are not much of my concern you know

Stephan Livera (24:03)
Interesting. Yes, I guess maybe one way to think of that is just like the Mexican monetary authorities and government have just been relatively less, you irresponsible compared to the past because 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, 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 an every for everyone, whoever? And give us a bit of an overview. What is the service offering there?

Gustavo Flores (24:49)
Definitely. I would tell you, Audio is a bit of a revival of the Verify platform we had in Mexico, in Canada, sorry, with a different approach. our goal is to build a white glove personalized service platform in Mexico for investors and companies. We think that this country has been dominated for too long by crypto casinos. it’s time that like investors are offered an alternative that not only like

Provides them a technical platform technological platform where they can buy and sell and do other things but also provides actually education and assistance For that process, right? I think Latinos we we often 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 platform and it’s open and we want to provide like a premium experience to everyone so ⁓

Right now you can buy and sell Bitcoin on audio. The sell is… We used to be called Swapiro ⁓ and our sell product comes 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 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 the follow-up plans are to you know become a full-on

Bitcoin platform similar to platforms like River or Onramp in the United States where you can buy, sell, custody, even take a loan, EDCA, things like that, right? I think we’ve had a lot of advancement in Europe and the United States for like a Bitcoin-only vision. And this is now finally happening in other parts of the world. So I’m glad to be part of this journey.

Stephan Livera (26:51)
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 the Mexico license and not had to deal with that at all. Was there a reason for doing the El Salvador process as well?

Gustavo Flores (27:10)
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 file monthly reports and share the data. Right. That’s what they carry.

But it’s not regulated as financial institutions are. Actually, the central bank of Mexico is extremely anti-Bitcoin and since 2019 has banned financial institutions from issuing Bitcoin crypto products. you can only offer

like Bitcoin services, if you’re either a non-regulated financial institution or if you’re 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’s absolutely no regulations or even ⁓

Stephan Livera (28:09)
Alright, okay.

Gustavo Flores (28:21)
It’s extremely unadvised to have Bitcoin in your books as a company in Mexico. So El Salvador was a great location, very affordable, very developed framework around this, also tax optimized. And it just makes sense for us ⁓ 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 Jibraltar.

crypto exchange. ⁓ And most crypto Bitcoin companies in Mexico, your counterpart will be a foreign entity. ⁓ So yeah, so that’s the reason why we chose El Salvador, why we had to choose a foreign country 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, 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 a crypto platform or what’s coming in the US, right? So all combined together.

definitely very accessible. would recommend people to explore El Salvador as a jurisdiction for like a headquarters for an international operation.

Stephan Livera (29:52)
Interesting. Okay. Yeah, cool. ⁓ And so ⁓ when it comes to I guess the Mexican landscape, how does, you know, a Rio compare with, let’s say the crypto casinos? What are the main differences that you would say?

Gustavo Flores (30:12)
Well, I guess the first one is definitely 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 taking money from people that are developing coins to launch their coin. So it’s always about…

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 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 self product which was the Swapido 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 Bitcoin trade Withdraw, you know just 10 20 steps that are for us. It’s just like 300 pesos create order pay from lightning wallet

boom, money arrives in the bank account within 10 seconds, right? And for the buy right now, it’s not our final product, but we’re also thinking in a similar way, right? Like enter a Bitcoin address, send pesos within 30 seconds, money’s either on the mempool or in your lining wallet. So we optimize for Bitcoiner experience. ⁓ We drive a Bitcoin-only message, and we also want people to, we also push a lot of

educational content or in community projects such as being part of the community in Mexico City called La Casa de Satoshi where we host monthly meetups in Mexico City and a lot of ⁓ other projects like that. So I would say that’s the difference, the message, the focus on education and community and the experience optimized for Bitcoiners.

Stephan Livera (32:17)
Yeah, interesting. I guess 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 12 and BIP 353 and lightning stuff like that and ways that like the payouts can be done in a way that’s more, let’s say Bitcoin 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 the tendency that I’ve noticed, whereas like the Bitcoin Maxi type of companies, they sort of focus more on that. So that could be interesting for people too.

Gustavo Flores (33:01)
Totally. That’s definitely something we all think we want to do. However, you know how it is running a startup. It’s all about prioritization. And I am a realist in the end. I do and I would recommend people like Bitcoiners to be more aware of what’s happening. 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, know, the reality or the technologies where they are. It’s like, yeah, I could launch Ball 12 tomorrow.

but nobody would be using it. So maybe I’ll just wait until the market’s there and the technology meet so that the timing is right.

Stephan Livera (33:42)
Yeah, also a fair position to take because you want, you know, as many, you want 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’s going on there?

Gustavo Flores (34:04)
For sure. So I was very lucky that once I launched my startup in Mexico, I had some friends that were actually opening a Bitcoin physical space. 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 bit depths at the end of the month where we cover more advanced topics. I’m the host of the

that meet up, but we also have more like networking and one-on-one presentations where the general public is invited to. It’s also a co-working space during the day where I and my co-workers at Audio, we work there every day. And the other Bitcoin startups like Kata Chef, which is a mining Bitcoin project in Mexico, they also work there, right? So it’s both, I would compare it to the space in Denver or even

Bitcoin Commons you could say in Austin where it’s both a co-working space where projects get built, ⁓ like it has the event space that happens every month, but also like digital communities and digital presentations as well. So you know 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 La Casa de Satoshi opened. So a lot of the community that was going to those events participating in that community they just shifted to La Casa de Satoshi and we kind of continued their mission and Lorena who was the founder of Bitcoin Embassy Bar is also part of our community and a good friend of us. So I think we also came at the moment where other

Bitcoin communities were launching across the country. So when I got to Mexico in 2021,

I couldn’t find one Bitcoin community in the whole country that was Bitcoin only, Bitcoin first. There were crypto communities or inactive projects. And ever since we’ve launched in La Casa Estos in Mexico City, in Guadalajara, ⁓ Chris Guida and SuperTestnet, they lead a developer meetup. In Merida, they also have a Merida community or multiple communities.

All communities are popping around the country. I would say the Bitcoin Only movement is finally happening in Mexico and we’re just very glad to be part of it.

Stephan Livera (36:41)
Yeah, it just seemed 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 going to keep going and keep

Keep meetups and events going. ⁓ But that said, once you see that, and this is something I’ve noticed in other countries, that once you have one really good, you plant one really good flag and then other ones can come up around that as well. what has been your experience there on the Mexican, let’s say Bitcoin only movement? Are you starting to see, okay, here’s another example. What about Mexican Bitcoin, whatever, podcasters or influencers or whatever?

Are you starting to see more of that or not as much? What’s your experience there?

Gustavo Flores (37:43)
you

Definitely starting to see more of that. I would tell you, and this is by no means a disrespect to Mexicans, but I would tell you that a lot is driven by foreigners. I personally am a foreigner. The guys in Guadalajara too, and Merida too, a lot of them are foreigners. But also, I would say it’s half and half. Some meetups you’d go, we went to a meetup in Puerto Vallarta. ⁓

Paco de la India, maybe you’ve heard of him. Paco from India, like, running with Bitcoin and he came to Mexico and we did a tour, he actually stayed at my house and we did a tour of like five cities, we did meetups all over the country and like saying Puerto Vallarta, it was only Canadians. No Mexicans came to that meetup, but when we went and like 35 year old Canadians, when we went to San Miguel,

Stephan Livera (38:18)
yeah, yeah, I know Parker.

Gustavo Flores (38:39)
The Yende, which is like a retiree city, it was only like 65 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…

Definitely a lot of big shift has happened over the past few years. 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 new ones being added. So I’m optimistic. However, I would add that the people in Mexico are

not 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 Swan or River or Strike did in the United States. So that’s what we want to do. We really want to iterate until we find the formula that actually gets Mexicans interested in this vision.

that I think we haven’t resolved for it yet, but many of us across the country are working on different projects to arrive there.

Stephan Livera (39:55)
Interesting.

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 are not 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.

Gustavo Flores (40:19)
That has been a lot the case in Suapito. ⁓

Over the past year, we have acquired many expats as customers, many already existing Bitcoiners in Mexico. We haven’t yet cracked the code on how to convert like no coiners to become Bitcoiners or even like crypto people to become Bitcoiners, which I think will happen with time. But definitely a lot of expats, like the big expat market here, definitely taking place.

Stephan Livera (40:55)
Interesting yeah now I know you guys did a raise with early writers so tell us a little bit about that and I know You know, I did an episode a little while back with Michael From on ramp and we were talking a little bit about that and what I found interesting with early writers 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 with ⁓ early writers and this Bitcoin hurdle rate idea?

Gustavo Flores (41:24)
Definitely. So I mean I met Michael probably five years ago when he was working at Unchain and I was at Verify. ⁓ So I mean we didn’t keep touch but once I got through an introduction I started talking with these guys was like I remember you Gustavo you know ⁓ from those days. ⁓ So I guess that helped a bit. I think the hurdle rate vision is very important you know because not only we’re like

Bitcoin has shifted how investment works.

But I also think AI has shifted how productive we are, right? And it’s like, if you don’t have a team that’s maximizing its productivity, chances are you will never be able to outperform Bitcoin. So for us, it’s very important that we stay lean, that everyone in our team maximizes its productivity with technology and particularly AI, which I think is strongly powerful.

That would be my addition to the Bitcoin as a hurdle rate. It’s like investing startups that know how to maximize their productivity to be actually able to outperform Bitcoin. So I think I do agree with all their thesis that the shift maybe there maybe we’re still in a fiat era for a couple years. most people won’t behave this way. But I think it’s wise to prepare for the Bitcoin ⁓ era and where this is going to work this way. So they invested 10 Bitcoin.

going on our on

on our company, we’re pretty sure we’ll be able to outperform that. ⁓ Their multi-institutional custody vision also impacted ⁓ how we see access to Bitcoin custody, and particularly related to Latin America. So I would tell you that a lot of the concern has been for Mexicans to like, why would I buy Bitcoin if I might lose it?

might get stolen from me, ⁓ how can I even make sure it’s secure? So I like the multi-institution custody balance that it doesn’t have a single point of failure. It even became recommended in like a Bitcoin policy institute. ⁓

⁓ report they did where they recommend state treasuries to adopt this this partition ⁓ strategy so we want to integrate with the on-ramp API once it’s settled and stabilized we want to integrate it directly on the platform so our customers can can buy Bitcoin and then hold it through the secure systems and directly on our platform. So it came a lot

The online relationship was a lot of, the early writers relationship was a lot of, not only we kind of have a similar product vision, but also just a general investment thesis vision plus.

kind of becoming friends too. So it all made sense in the end and I think they were also looking to expand their horizon beyond the United States. They have like on-ramp MENA as a portfolio company and the right is focused in the Middle East so ⁓ I think we’re gonna be there to let them play in some ways.

Stephan Livera (44:53)
Interesting. Yeah, and then yes, 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 obviously maybe they’re not ready for the full self custody journey ⁓ and you know, I can understand where maybe like a high net worth person maybe might be more comfortable with that because they’re kind of

They want some 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. 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 Bitcoin in Mexico?

Gustavo Flores (45:53)
Definitely, so I mean I think people should ⁓ come to Mexico if you’re interested in this experience. La Casa Satoshi, I think everybody would be impressed of the quality and the community we’re building in Mexico City. There’s also a conference in 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…

across the country and ⁓ I would tell people to be more…

open-minded about how Bitcoin will be adopted across the world. 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 made differently. And that has been a big lesson for me, right? So I talked about it from a humble point of view where I was humbled by that experience and I want to advise people to be open about that.

But yeah, we please follow us to stay updated on everything we do We have a lot of stuff coming up over the next few months and thank you Stephan for having me on your part. Yes

Stephan Livera (47:10)
Yeah, of course. And what’s the website for Aureo just for people who are listening?

Gustavo Flores (47:15)
audio bitcoin dot com

Stephan Livera (47:17)
Excellent. Okay, yeah, links in the show notes. yeah, thanks for joining me and yeah, good luck with it, Gustavo. Thank you and I’ll see you around.

Gustavo Flores (47:24)
Thank you.