Arbitrum Welcomes Mexican Peso-Backed Stablecoin by Bitso

Bitso, a leading Mexican cryptocurrency exchange, launched MXNB, a stablecoin pegged to the Mexican Peso. The stablecoin, issued and managed by Bitso’s subsidiary Juno, is now live on Arbitrum, an Ethereum Layer-2 network. 

MXNB: A Fiat-Backed Stablecoin for the Mexican Market

MXNB is fully backed by Mexican pesos at a 1:1 ratio, ensuring its value mirrors that of the national currency. According to Bitso Business, Juno, the company’s new subsidiary, will oversee the management and issuance of the stablecoin. 

In a bid to ensure transparency and instill confidence in users, Juno has committed to regular independent audits of the reserves, with attestation reports published publicly on MXNB’s dedicated website.

Ben Reid, Head of Stablecoins at Bitso Business, highlighted that MXNB could solve some of the significant challenges faced by global companies when serving new markets. 

“Global companies face significant monetary challenges when it comes to serving customers in new markets and conducting cross-border payments, including high intermediary costs and inefficient transaction times,” Reid said.

The goal is to offer businesses a faster, more efficient, and cost-effective alternative to traditional financial systems, particularly in cross-border payments.

Mexico’s Booming Remittance Market

The launch of MXNB comes at a time when Mexico's remittance market is booming. Mexico is the second-largest recipient of remittances globally, with the World Bank estimating that it received $61 billion in remittances in 2023. The majority of these transfers come from the United States, and cryptocurrency has increasingly played a crucial role in facilitating these cross-border transactions.

Crypto research firm Chainalysis has noted that Mexico is one of the most important markets for crypto-based remittances. Latin America, as a whole, saw a 42.5% year-over-year increase in crypto transactions from July 2023 to June 2024. 

In this context, MXNB has the potential to serve as a bridge between the fiat peso and the global crypto economy, especially in regions where financial services are expensive or limited.

Arbitrum, an Ethereum Layer-2 network, is designed to reduce transaction costs and latency when compared to Ethereum’s mainnet. This integration makes MXNB an even more appealing option for remittance transfers and decentralized finance (DeFi) applications in the region. By utilizing Arbitrum’s high-throughput capabilities, Bitso’s MXNB stablecoin aims to create a more seamless and cost-effective experience for businesses and individuals in Mexico and beyond.

Growing Stablecoin Adoption in Latin America

Latin America’s adoption of stablecoins has been on the rise in recent years, especially in countries experiencing economic instability, high inflation, and currency devaluation. According to Bitso’s Latin America Crypto Landscape report, there has been a notable surge in the purchase of stablecoins on its platform. Many people in Latin America have turned to US dollar-pegged stablecoins such as USDC and USDT to protect their wealth from the volatility of local currencies.

The launch of MXNB provides another stablecoin option in a market already populated with alternatives like MMXN, backed by Monetary Digital, and MXNe, launched by US-based Brale on the Solana and Stellar networks. Despite the competition, Bitso reportedly has a significant advantage: it is the most dominant crypto exchange in Latin America, with over 7 million users across the region.

Trust and Transparency

Juno, the entity responsible for the stablecoin’s issuance and management, will operate independently from Bitso. This separation aims to ensure transparency and regulatory clarity, adhering to best practices for stablecoin issuance globally.

Juno’s commitment to offering public audits of the reserves aligns with the ongoing scrutiny that stablecoin issuers face from financial regulators worldwide. With public attestation reports, Juno strives to build trust between retail and institutional users, ensuring MXNB's trustworthiness.

The launch of MXNB is expected to be a game-changer for Mexico’s crypto ecosystem. As Latin American businesses increasingly look for faster, cheaper, and more secure financial solutions, MXNB could serve as a critical link connecting the digital economy to the traditional financial system.