Interview with @ErnestoContrer, founder of Unalivio and Caracas Blockchain Week

Hello everyone, this is the belated transcript for the Tuesday, April 23, 2024 ESW Webcast number 3 recorded with Ernesto Contreras Escalona, the founder of Unalivio, a stable coins-based DeFi payments platform serving the Venezuelan and several other Latin American remittances markets. Enesto joined the ESW program from Dubai, UAE where he was a speaker at the Decentralized Web 3.0 Investment Conclave.

We plan to have some other DeFi entrepreneurs Ernesto knows on the program as well as other guests recorded live from Dubai well. Stay tuned!

-- James Smith

Monday, May 6, 2024

ESW Introduction to Ernesto Contreras DeFi Entrepreneur and Founder of Unalivio

James Smith: Rumble’s live too. Alright…uh hold on its saying that there is a trouble streaming to a destination. But I think that's only for Vimeo. It should be streaming no problem to Rumble…yeah it says three viewers waiting. So that's two of us. How are you doing today Ernesto? Or this evening I should say, in Dubai.

Ernesto Contreras: Yeah, I'm doing great. First of all, thank you for hosting me here at ESW. And thank you for your patience and for going through the time difference in organizing [this show]. I'm still in Dubai. It's been amazing. Already closed the Token 2049 week and moved on to the next things that I'm doing here for the couple of days that I'll [still] be here. And thank you for organizing [the show] despite the time differences.

James Smith: Yeah for sure and thank you for joining us, we really appreciate you taking the time out of your busy schedule while you’re [at the conference in the UAE]. I know you were [joined by] panelists at the conference and you've been meeting with so many DeFi and blockchain professionals there. And it's great to have you on the program and be talking to somebody who is actually, you know [in the industry]. We're all about people who build things on this platform. And we see ESW as something that is like an open architecture platform for offshoring and internationalization, using fintech and using gold vaulting as tools. Means to an end of greater wealth and freedom for people to enjoy multi-jurisdictional living, to maximize their tax savings, to maximize their quality of life.

So that's what we're really all about here at ExitStrategy.World. So, we really thank you, Ernesto, for joining us today. We've got a few questions to discuss.

First of all, about your background. I know you were born in Venezuela. And you now reside with your family in Mexico City. So, we're going to talk about that a little bit, what inspired you to become a DeFi entrepreneur, partly because of the [socioeconomic] tragedy and the situation in Venezuela with the hyperinflation that they’ve had over the last several years. And maybe there are some, you know, early green shoots developing there of recovery.

We had Andres Villarroel of Venezuela Insider on late last week, recording him on our second webcast. This is actually our third in the series [of shows] so yeah we're off to a pretty hot start you know. Three webcasts recorded in the past 10 days. So we're aiming to make it at least one per week probably two once we get VJ Varghese our CEO starting to stream at least one guest per week ideally, then we'll be stacking content And we'll be able to get a lot more momentum in terms of having the clips cut by our video editing team so we can post those short excerpts from these longer webcasts on our TikTok, on our Instagram. And of course, on our X channel, you can follow us on Twitter @exitstrategyw. That's @exitstrategyw DUBYA for the win. And Ernesto, tell the audience your Twitter handle to get started.

Where to Find Ernesto on Twitter, @ErnestoContrer

Ernesto Contreras: Yeah. My Twitter handle is @Ernestocontrer. I'm going to be tweeting right now.

James Smith: Sure.

Ernesto Contreras: Giving you a shout out but yeah @Ernestocontrer…

DeFi as an Answer to the Inflationary Failures of Governments

James Smith: Yeah okay I see where we're live on X as well so that's good. I'm just gonna go ahead and retweet that so here we go alrighty and we also should be streaming live on Rumble on our Rumble channel, looks like. All systems are go there, and like I said, I don't know about Vimeo. Vimeo is kind of the orphan of the group, but in any case, we are really glad to have a tool like StreamYard, where you can single stream to multiple channels at once. I'm not here to plug them [to our audience]. I'm just mentioning it, what we're using as a tool.

And regarding, you know, I think you mentioned Ernesto that, some things that you're passionate about are, like you said, that Blockchain and DeFi, that is cryptocurrencies, are helping people escape the failures of governments, of central banking, when these create hyperinflationary situations, or even now in El Gran Norte inside the United States of America, the severe inflation that is starting to really impact people. And what we're seeing is that a lot of even retirees or near retirees are starting to contemplate potentially relocating South of the Border to make their 401ks and their you know, if they are lucky to have a pension, their government pensions stretch further. Talk about, you know, kind of what you're hearing [at this week’s conference]. Well, first of all, let's bring it back to Dubai. What you heard at the conference this week, like what were the main themes that you're hearing from the other entrepreneurs there on the ground?

On the Spring 2024 Rainstorms and Flooding that Struck Dubai

Because, number one, I'm fascinated by the fact that, you know, not everything's going to the States anymore. You're having these direct connections made between entrepreneurs in LATAM and, you know, the VCs. in the UAE, in Dubai, in Abu Dhabi. I mean, it's a major venture capital center for the whole world in the DeFi payments space right now. So, tell us what did you hear at the conference this week and what were your favorite themes?

Ernesto Contreras: Yeah, well, first of all, again, thank you for having me here and for allowing me to share what I've seen in the past week or so with your audience. Okay, number one, and I have this pending for a tweet storm--I think I'll do a recap here. Number one, of course, people were talking about the [rain]storm and, you know, how the weather [impacted Dubai].

James Smith: Oh, yeah, the storms, yeah. I didn't want to skip that over because everybody's like, “Oh, you know, it's so awesome. Everybody is always hyping Dubai, and then they don't cover the dark side or the downside.” So, I want to hear your take on what happened with the storms.

Ernesto Contreras: Yeah, so it was really interesting coming from a place where there's always news about things, seeing it play out in another place [in the UAE]. It was interesting to see how there was a lot of misinformation about at least what I saw from Dubai and how it was magnified to make it [the flooding] look worse than it was.

Yeah, there was a huge storm. I don't remember the data, but it was something like...five years’ worth of rain poured down in three days or something like that. So, I mean, regardless, I don't, I'm not sure if it was five years’ worth of rain or the highest amount of rain in five years or whatever, but you know, there was a lot of rain. And so, imagine, you know, [all this water dropping on] a long highway of, you know, whatever, 50 kilometers length.

What happened is that you had several batches that turned into like lakes and you know you were going and then it was wet, and then it was really wet. And then there was like a lake that would stop all of the traffic. And then after you pass that little pond or that lake you would have a lot more of the highway and I'm talking about the main highway that crosses Dubai from one side to the other. So that created mayhem throughout all the city and that you know just basically stopped all of the traffic.

So yeah in these lakes, you could see even at some points that cars were completely covered, but at most places for cars the water got to like the door or something. So what I'm trying to say here is that, despite the you know physical damages that this could have happened [almost anywhere]. At least from what I saw, it was not the damage that we saw on TikTok and on Instagram that, you know, [portrayed] the whole city [in a state of] collapse and things.

I believe there were some news media that magnified the amount of the flooding. It stopped the city for sure, but I didn't see that it was something that that killed people. So having said that, it was very much like I didn't do anything on Tuesday. I was lucky to arrive here I think at 5 a.m. and then the big rain started somewhere around Noon. And then everything got [halted] somewhere around late morning. So, everything stopped in the city on Tuesday. And then on Wednesday, I heard that most of the taxi apps and the taxi drivers stopped servicing [riders]. So, everyone that came to the conference was stuck in one place. And remember what I told you about the lake.

So, if you were trying to walk away from the airport to a hotel, you were probably walking and then got to one of these patches of water. So yeah it was it was really bad, but I didn't see something that I would consider would be deadly to people. And yeah I guess that this place being in the desert probably they didn't expect this to be so strong, and I I'm not minimizing it. Yeah there was a big flood and I'm pulling up my phone now so you can see how it was. This was me recording the going through on Wednesday. [Ernesto holds up his smartphone to the webcam while its playing a video of the floodwaters].

James Smith: I can see that. Yeah.

Ernesto Contreras: Yeah. On Wednesday when I went out, remember that like, this is one part that was overflooded and we were, you can see the car in front of me, how the water gets to his, um, wheels, but you know, it's not as, as bad as, um, you know, when you got to one place. And then when you kept riding, you know, just a few meters after this, you would see this. You see? [Shows smartphone screen to the webcam]

James Smith: Yeah, that's clearer now.

Ernesto Contreras: So, yeah, you would see patches that were completely dry. And this was on Wednesday. Other patches that were overflooded. And then it took a few days for the authorities to dry up the parts that were flooded. And I imagine that they're working now on figuring out what happened and how to...not make it repeat. So going back to what were the talking points, this was one of the things and you know sadly a lot of people got caught [in the flooding] so imagine you and I were at a networking event on one side of town and then everything started pouring down and when we wanted to go back, we probably got stuck, because you know there was a couple of lakes in between our location and wherever we were going next. And there were no taxis, as I mentioned. So that's what created a lot of chaos. And definitely, you know, the city was stopped, and I just want to…

On Envy of Dubai’s Success Driving Negative Coverage of the UAE Flooding

James Smith: You could dump the same amount of water on any city in the planet and it would have shut things down for a while. I mean it's not like if this is unique to Dubai and the thing that people have to understand is, yes first of all it was maybe an unprecedented amount of rain. I know there were flooding problems earlier in Oman, which is right across the [UAE] border that there was flooding…so if people want to talk about the cloud seeding or what have you, you know, there's some controversy about that. But it seems to me that this was maybe an extreme outlier event. And, overall, I mean, Dubai is a fantastic place to do business.

It's an amazing place in terms of what you can get in [restaurant meals and luxury] amenities. Everything's brand new. You know, it's been built in the last 30 years or even some would say, I think the majority of the construction is in the last 15. And, you know, I definitely think there's a certain amount of envy that maybe drives some of the [social and legacy media] coverage that that. People you know as they say, “Haters want to hate” like they can't, they can't really match what Dubai has to offer in terms of modernity as a city. I mean that said, it's not for everyone in terms of obviously the summer heat and the other [atmospheric] conditions. But when it comes to just a place to get together with people from around the world [for conferences and business meetings] it's just unparalleled, I mean. I mean, would you agree with that statement, Ernesto?

Ernesto Contreras: Yeah, I mean, definitely. And I mean, I didn't get to tell you, but 12 years ago, I lived in China for about two years.

So, I see the similarities when places are developing and they're growing, they usually get, just like anything that's rising, it happens to people too. They get a lot of naysayers and a lot of people trying to figure out what they're not doing correctly, or comparing it to places that are already developed. I call this just growing pains. Maybe they weren't expecting such rains [in the UAE] but I would imagine that they're figuring out how to solve it. Coming from LatAm where we haven't developed as much as we wish we did, when I see all this growth, and whether it's [happening over] 30 years or 15 years, It's amazing. And yeah, not everything is, you don't get everything right the first time around.

So, you know, I just wanted to give [some] perspective and not to minimize it, but also not to say that it was, and there was a lot of AI [fakes]. I don't know if you saw some [of the fake imagery like] Ferraris [floating] on top of boats and things. That wasn't the case. It was just like you see flooding in any other city, you know, a part of the road gets flooded and then people try to, drive on the right or the left side [of the road] where it's not flooded. And it was very annoying, [the flooding] it stopped the networking event and the visitors from moving for a day or two. Then Thursday was pretty much good, and then on Friday I would say was you know 90 something percent [of traffic was] up to normal. And today I went out and I called an Uber and literally in 45 seconds, the Uber was [arriving] downstairs, which is the norm here in Dubai. So, I guess that, you know, it's all back to normal. There is still a bit of water in the place where I am. I don't know if you see the greens, there's like a lake behind in that golf course and the lake is still overflooded [its banks], but yeah, flooding doesn't just happen in one place… [inaudible] passing that [topic], I think we spoke too much about the flooding…

Something that was really interesting and that I started to see about a month ago, I was in Denver for ETH Denver. Man, people are here figuring out how to set up their businesses outside of the U.S. I met a lot of entrepreneurs that are looking at Dubai seriously and saying, “How do I open an office here?” Same thing when I was in Denver, I got approached every day a couple of times per day by people that were asking me, “Is Mexico a good place to set up my business? What happens if I open a company in the Cayman Islands and then I have my offices in Mexico? Especially in crypto?”

James Smith: Yes.

On Hostile Regulators in Washington Driving U.S. Crypto Creators Offshore

Ernesto Contreras: Or very much in crypto [is where I see people asking these questions about global relocation]. The recent news headlines, that's the [Gary Gensler SEC] army against crypto is doing its job to drive entrepreneurs outside of the U.S. I been in the industry for about seven years, and all the other years my friends and the people that I know were doing you know, trying to hire more people in the U.S., trying to open another office if they were out West [Coast], then on the East Coast or vice versa. Now, many of these people are figuring out, well, should I open an office in El Salvador or in Brazil? And here, when I was in Dubai, I spoke to a couple of entrepreneurs and they were saying, “Well, Dubai seems like a good place to work.” I mean, those that were over the flooding after that, they were like, “OK, that that made me angry, but still, I'm looking at this [place for setting up operations].”

And I'm not talking about the natural [Eurasian] countries that surround the Emirates that would come here, like India, China, you know...

James Smith: Pakistan[is], Russians…

Ernesto Contreras: Slavic [countries]…yeah, Russians, Ukrainians, you know that they would naturally come here because this is a commerce center, a commerce center for centuries [to come]. I'm talking about people from the U.S. that they’re considering with more seriousness the things that this place [Dubai] has to offer [fintech entrepreneurs].

On Amparo and Co, ESW’s Sister Company Based in the DMCC

James Smith: Briefly, Ernesto, two things.

Number one, our sister company Amparo and Co., which is [the entity] that handles the large gold-volume vaulted transactions as well as the Bitcoin and stable coin liquidity services that we offer [at ESW], is registered in the Dubai Multi Commodities Center, the DMCC. That's number one.

Number two, my [ESW] CEO, VJ Varghese, is in the process of becoming a UAE resident. I mean, that's still a work in progress, but it's coming together.

Number three, we have UAE banking services that we'll soon be able to offer and number four, you mentioned the Caymans. We have a legal back-office partner [in California, Texas and Florida] that we can work with our clients to help them set up a Caymans account, if they want to do that. Or you know, incorporate in various jurisdictions offshore that can act as the umbrella for a company if they want to operate the company in Dubai. Anyway, we have a back office there [in Dubai] as well.

On Washington’s Well-Founded Fears of Crypto/DeFi as a Threat to the King Dollar Incumbent

So, all of this, what you're talking about, where the crypto entrepreneurs, the people who are actually building things, that are sensing that the SEC under Gary Gensler is hostile to what they're doing, that are understanding that the U.S. government feels threatened by DeFi--precisely because the world reserve currency status of the dollar is getting shakier and more fragile by the day. And they see DeFi also as a threat to the megabanks to you know, undercut some of what they're doing-- and we'll talk about this in a moment--in terms of remittances and payments from people…hard-working Latinos in the United States back to their relatives in Latin America. That's been a profit center for a lot of the banks, for Western Union for all those you know, remittances companies for decades now. And DeFi, you know, crypto has a chance to disaggregate that, to basically cut into those oligopoly profits that these companies have been earning for so long on the backs of hardworking people.

And, you know, that's…let's be honest, like my friend Dimitri @BacktheBunny likes to say, if you're sitting in this [King Dollar and megabanker] incumbent's chair, then DeFi is objectively a threat to undermine your profits and your power, right? [DeFi reduces your power] as the world reserve currency issuer because there are new offshore financial centers developing, there is Dubai which wants to do business with everybody…you just mentioned the Russians and Ukrainians a moment ago. I've talked to Russian entrepreneurs and they say, “You know there's no there's no war [between Russians and Ukrainians living] here you know, there's no problems. One of the [Russian] gentlemen I spoke with has a Ukrainian business partner I think he was from Kharkiv [also spelled Kharkov in Russian]. You know, it's really [clear] the times are really changing. And Washington and to a certain extent, the City of London [banking cartel] as well in the UK is trying to play catch up. And they're not dealing with it very well.

On the Transition from a Declining Ancient Rome to the Byzantine [Eastern] Roman Empire

I think even mentally as policymakers, I mean, obviously politically. What late-stage empire did deal with it very well? You know you could look back at ancient Rome, when there was a transition from the western part of the empire to the eastern provinces, you know that happened where Rome started to decline and the Third Century AD crisis occurred, and what happened? The Romans set up a capital in the eastern Mediterranean in Byzantium, you know, what is now Istanbul, was Constantinople in Turkey, that is a crossroads of global trade across the Bosporus between the East and the West. And what Dubai is doing today is very similar to that, what I see them doing. And they're open for business to everyone [all the great powers in multipolar fashion]. You know, you have 200 people from 200 countries and territories living in Dubai. It's amazing. what they've been able to accomplish there, in such a short time.

And you said it correctly, Ernesto…and I'll get to your impressions of China in a moment. But there's a lot of tall poppy syndrome, as the Australians would say. There's a lot of envy, a lot of trepidation, because the world is changing so fast, and certain powers that be, certain incumbents, they can't keep up.

Moving to Mexico City as a Solution?

But, yeah, we are looking to help precisely those kinds of people that you've been talking to in Denver and now at this conference. We're [listening to them say things] like, “Maybe it is time I incorporate in Dubai” or “Maybe it is time I set up that offshore bank account” or you know, an offshore corporation to protect my assets. So that I can operate in Dubai or I can operate, you know, if I want myself and my family to be in a time zone that's convenient to all the people I still know in the U.S., maybe [moving to] Mexico City is a solution.

And I want to get your thoughts on that, too, because I'm starting to hear this more and more that more entrepreneurs, not just those of Mexican-American origin, are starting to look at potentially living in Mexico or maybe El Salvador full-time, you know, if you stay out of the U S I think it's more than 340 days a year right now, that is you're only in the U S for like 25, 24 days out of the year. So that's what? Three and a half weeks only spent in the U.S. per year to qualify as, you know, an overseas tax resident.

On Establishing Territorial Taxation for Americans Abroad

Now you still have to file the FATCA. You still have to, as an American citizen, you know, it's still a pain [in the rear] because you [have to file FATCA], It doesn't mean that you're not filing with the IRS and you're not dealing with all the things as a business owner who's still earning income from clients and customers in the United States. But it means that uh there is a chance to reduce your overall tax burden if you can establish residency in a [territorial taxation] Latin American country. I know Paraguay has become very popular on X [for this reason]. There's a lot of discussion about um you know from our friends at Plan B Paraguay, we've talked to them and some other people about establishing residency in a Latin American country for the purposes of reducing the tax burden dramatically, whether it's from the US or Canadian tax system.

We're not giving tax advice to anybody here, but we're just strongly suggesting that with the direction the dollar is going and the Canadian dollar as well with it--the severe inflation that’s coming, that people definitely look into it. Especially if you're running a crypto or a more location-independent business that is not chained to a particular brick and mortar location. In that case everybody needs to look into this and look at their options and understand the options so they can make an informed decision. We're not telling people, “Hey go to this country,” or “Go to that country!”. We're merely giving people suggestions on “Look, there's a whole world out there of opportunities right now. Yes it's getting darker in the Western World or as I prefer to call it the post-Western world, because I think a lot of the Western values are getting [trashed]. You know, [our civil liberties] are under threat, particularly the Freedom of Speech [without getting ‘cancelled’], the Freedom of Association [including the trans agenda destroying women’s sports], and the economic freedoms that were very hard-earned, which made the West such a powerhouse for so many decades, they've all declined, right?

And Latin America may be, just may be on the cusp of something very big, what we [on X] call the Latin American Renaissance. You know, people in El Salvador call it Renacimiento, And I wanted to get your take on that [idea] too, because what do you think, what does the Latin American Renaissance mean to you? And are you seeing it, at least the start of something big on the ground, not just in El Salvador, but I mean, an ideal that's spreading to other countries too. Go ahead…

The Brokenness of the Fiat Banking System is a Matter of Perspective

Ernesto Contreras: Well, I mean, I'll start by threading a bit on some of the things that might be happening with regulators in the US. And I'm just going to quote a friend. She's an African American woman of Caribbean descent living in the U.S. And when…she's an expert in regulation, she's been working there for all her life. When I asked her what she thought of, you know, the Gary Gensler's of the current U.S. government, and she was saying that, and I like this explanation, that she doesn't think they're ill-intended or they're trying to hurt someone.

It's just that if you're a white guy that worked for banks for all your life, and you know are a millionaire and now you're a regulator, you just don't see that there's anything wrong with the system. You know? You grew up and with all this benefits and you know you're like, “Hey why would anybody want to change this?” You know the JPMorgans or the whatever big banks of the world [for them] this is working correctly. So I like that point of view. I think that you know, maybe it's not that they just want to hurt people [in the DeFi industry]. It's just that they don't even see that that system is not working for a majority of [the] people [worldwide], especially I see now, and this is my interpretation, the younger generations. The ones that are not the people that grew up with that old [U.S. Boomer] mentality and that see that there's other things.

On Latinos’ Mixed Feelings When Gringos Praise Everything in LatAm

And it's really interesting to see that what we as Latinos have experienced for years, you know, the [runaway] inflation, the governments that we regard or disregard as being very corrupt, and not in line with [the] people is something that some of the US population is seeing [in Washington] right now. And that takes me to the [topic of] Renaissance across LatAm. What I think is that some people are beginning to see that. Some people in the US are beginning to see for the first time that it could be an option to live outside of the US, and some are seeing the good in LatAm [traditional values, more relaxed, affordable lifestyles]. It doesn't mean that LatAm is completely changing or that it has something [so much] better to offer than it did a few years ago.

LatAm has its colors and its flavors and some things are really good, but there's also a weaker system. And what I tell my friends from the US when they're, you know, exploring whether to move to Mexico or any of these other places, that, yeah, there are some parts of the cities or of the countries in LatAm where you can have a very good life. Like, you know, Caracas was in the 1980s. Now a lot of people are seeing the good of living in, you know, the Roma or La Condesa [affluent neighborhoods] in Mexico City. But I don't want to paint a too rosy out view of it. LatAm still has not changed the things it should change for order to have a real Renaissance.

What Does the Latin American Renaissance Mean to Entrepreneurs Like Ernesto?

I don't know about El Salvador. I was there a year and some months ago, when [President Nayib] Bukele announced Bitcoin City. And from what I hear, they're doing the right changes like working hard on minimizing or eliminating the violent crime. And that's a big problem in all of LatAm, so if he [Bukele] manages to do that correctly, then many other things will flourish. I'll just give you an example: in LatAm there's billions of dollars that are being wasted [on private security agencies] and used in controlling the insecurity, because you know people don't build more businesses. Because they can get robbed, or they can get you know stopped [and shaken down] by [cartel linked] mafias. So then if you stop that, then a lot of the other problems might get solved.

Overall, I do think that LatAm is that forever promise of: it's going to be the next big thing, just like China was, just like Dubai has grown [in the past 30 years]. And I hope that, you know, with the recent [DeFi] technologies and the brains that are coming from other parts of the world, that are helping the [Latin American] entrepreneurs see opportunities, that we can be that light, that spark that allows to flourish more benefits and more wealth and more education and more development for LatAm.

So in short, this Renaissance, I think it's a lot of people from other places seeing the good things of LatAm and I hope that with these new people and ask the people that live in LatAm, we can work together to make it happen. And have a real Renaissance that's sustainable and that helps the countries and the people [of all the Americas] improve for the better.

The USA is Becoming a Latin American Country in Terms of Income and Education Distribution

James Smith: That's a, that's an excellent answer and I certainly wanted to…you know, as I've gotten more experience with these webcasts [now on number three], I was on many webcasts previously, but I was never the host. So, I definitely want to give people the opportunity to make longer answers and longer to immediate size answers and also…from my perspective here in the U.S., and I mentioned this to Andres Villarroel of Venezuela Insider last week…

The United States is becoming, to a certain degree, a Latin American country. And I don't just mean in demographic terms of countries from which the migration we've had over the last, let's say, 35 to 40 years coming from Central America, from Mexico, primarily into the Southwestern United States [Texas, Arizona and California]. But also to other parts of the country. You know, certainly there's a large Chicano community in Chicago and other places in New York [City], in the north as well, and even places like Seattle, let's say, than you have just in Texas or Arizona or New Mexico.

But what I mean is that the U.S. is becoming more Latin American in terms of the distribution of income, in terms of the education levels of the population overall, the [steep] curve of it, that you have some very highly educated people, but you also have a larger group of people who don't have access to those opportunities. And also, just in terms of the political corruption is becoming such a huge problem [in Washington]. President Eisenhower warned us back in the early 1960s about the military industrial complex. Certainly, Latin America has struggled with, let's say, the militarization of life because of the security problems, because of the ideological polarization during the last Cold War. You had Operation Condor [rounding up and jailing of Leftists], you had military dictatorships in South America and Central America [from the 1950s through the 1980s], things like that.

And here in the States, I mean, people talk about Trump and try to make it all about one man and one person. But the reality is, that Trump is a kind of Latin American-style leader, to some degree, and that is [the elites’ perceived threat of] populism. And Andres Villarroel and I talked about this last week, that Trump is kind of like a LatAm populist. He's making big talk, big promises, but at the end of the day, you see what's happening. He's on trial and he may be on the ballot on Election Day [this November 2024] from jail in New York for all we know. And not to get off on the tangent on Trump, because this this show isn't about partisan politics, but our main point is that know what's happening to Trump what's happened to [Jair] Bolsonaro there's a lot of similarities you know you can draw, a lot of parallels to situations that have happened in Latin America I remember I think [Alberto] Fujimori, he went to jail in Peru several years ago…

Ernesto Contreras: Yeah.

A Ron Paul Joke That One Day the Wall on the US-MEX Border Might Be Used to Keep Gringos In

James Smith: He was the elected president of Peru, he was a guy of Japanese origin which kind of made him stand out but I mean, what I'm saying is that the U.S. is not – we're not so distinct, as distinct from [our southern neighbors in] LatAm as we like to think we are. We have a lot more similarities than have previously been acknowledged. And even the inflationary situation now is something that people on both sides of the border have in common.

You know, I was talking to a lawyer in Mexico City several days ago, early last week, and I told him Ron Paul the Texas libertarian congressman who's now retired, his old joke about how you better be careful about putting a wall on the US-Mexico border, because one day the US federal government might use it to try to keep the gringos in, not to keep [illegal alien] people out, you know?

The USA as the Late Stage Roman Empire and Latin America as the New Rising Byzantium

So, it was like, and obviously if we're on the cusp of something big of even potentially, you know, a civilizational change, like something that happened, maybe the last time it was seen as happening was the, you know, the fall of the Roman Empire [in the 3rd and 4th centuries AD]. Or the transition, some would say, in the Roman Empire from the West to the East. I look at LatAm as potentially the Byzantine [imperium] to the United States' [late stage] Roman Empire because Russia, you know, it's the Third Rome. It certainly has a lot of things going for it for the longer term [in terms of economic development]. It [Russia] has vast natural resources. When I look at where the talent is going to go, where the biggest opportunity lies, it's probably closer at hand, when you're looking at Mexico or you're looking at potentially a place like El Salvador.

Could Bukele-ismo Work in Mexico? Is It Working in Ecuador Where the Gangs Are Rioting?

Now, obviously, geographically, it's not as simple…there's a much bigger challenge to cleaning up a country the size of Mexico, to dealing with the gangs and the violence there than there is in a smaller country like El Salvador, because El Salvador is more geographically compact. It's not... let's say, directly on the routes of the drug trade smuggling into the United States as much as Mexico is, or as much as, say, even Ecuador is…where the president is trying to implement some Bukele-ismo solutions to the [Ecuadorian] narcogangs problem. And he's encountering, you know, way more violence, more pushback from the gangs [in Ecuador]. Because they saw what happened in El Salvador and they they're fighting back right now [with kidnappings, prison riots and other mayhem]. And so there's some bloodshed going on in Quito and then you know, in the prisons down there have seen some [prison] riots and things like that so…

Tell me about what would you say was the main theme of the conference for, what is the main thing you're hearing as a Latin American DeFi entrepreneur from the venture capitalists? What are they looking for? You co-founded a company. I don't know how recently you founded Unalivio, but with the time that we kind of have left in this hour, Let's talk about Unalivio, and what motivated you to found the company, number one, and what venture capital is looking for in the opportunities in Latin America in the payments [and remittances] space.

Ernesto Contreras: Yeah, great conversation, and we totally got sidetracked.

James Smith: On [U.S.-LatAm comparative] politics, but I want to talk about entrepreneurship.

More North Americans Are Seeing the Good in LatAm, and That Creates More VC and Other Funding Opportunities for Start-Up Entrepreneurs Like Ernesto

Ernesto Contreras: Yeah, and just to kind of give a closing thought there, as I said before, I don't like to minimize the issues. LatAm has lots of issues, and we have deep issues that run as Latin America, things that run deep into our societies, [dating back] even hundreds of years, and every country is going to have a different issue to deal with.

And, you know, like I said, I believe some people [in North America and Europe] are starting to see the good things in some of LatAm, and also there's things that are challenging or to take care of. And in terms of, you know, where Unalivio is, it’s a payments method for small and medium enterprises in LatAm. We enable people to pay cross-border for their goods and services of their family.

On Unalivio as a New Stable coins-based Payments Platform for Medical and Family Bills

So, it's kind of like a way of sending money, but instead of sending money, you pay for goods and services like the doctor's consultation of your family. So instead of going to these legacy offices and waiting in line for three hours and then having the other person go pick up the money, you can directly pay for a blood test. And then your family can go and do that and move forward and start taking the medications they need.

This is a project that I've been working on for more than a year, and I finally dedicated myself with heart and soul into it full-time since the end of last year. And we came here, we started talking to some VCs and some investors, and what we're seeing is that there's a lot of interest on the stable coin use case, especially in what is known as the Global South, because VCs see that. That's even though it's like 10% of the overall crypto market [in terms of people], it accounts for I think over 70% of all the transactions in crypto.

On DeFi Tested in LatAm Spreading to the Vast African and Middle East Remittances Market

So, they know there's something out there and they know that people in Latin America are used to looking for other types of currencies besides their own. And stable coins are one of the big solutions [to LatAm inflation and inflated currencies worldwide]. So, there's definitely a lot of interest there. VCs are open to hearing how entrepreneurs like myself and many of the other guys that have built big companies are going to tackle these problems using the latest technology. And it's amazing to see that some of the solutions we're building can and will probably also be exported to other places, because a migrant from Pakistan that comes to Dubai has similar problems than a Venezuelan that went to work in Colombia or Chile or that...

James Smith: Or an Egyptian in Dubai too. Egypt is a huge, potentially huge market. I just published a piece on the Patreon of ESW about the... and it was a very basic introduction to that [Egyptian digital payments] market. But there's 113 million people in Egypt. I didn't realize that the population is still one of the fastest growing emerging market populations in the world. So, yeah, exactly.

Ernesto Contreras: Sorry. And still probably I don't know the rates, but I'm sure that, you know, those guys at the big corporations, they love to take, you know, that 11, 20, whatever percent of [ridiculous] fees and when somebody is trying to send money back [home to LatAm]. And that's where the smaller, more nimble fintech startups are finding that huge opportunity. In our case we're starting to serve the Venezuelan market and we're starting to serve those eight million Venezuelans [over one out of every five Venezuelans] that have moved abroad and are sending resources back home. But the same principle applies if you're a Colombian living in Spain, you're paying almost eight percent in fees and your family's having to wait hours sometimes even a day to go and collect the money [at a Western Union or other payments processor office]. So it is the same pain I'm gonna call it and the solution is, well, we use this technology to make people's lives simpler and more efficient.

And that's what I'm seeing here in Dubai. And it's the same thing that I saw back in Denver. And we hope to, you know, take it to the next level and impact more people. That's been a lot of our motivation. When we see somebody that's sick, that's requesting for help, we say, well, we need to get an Unalivio to scale because this is gonna impact a lot of people in a good way.

Could Unalivio Be Used for Secure Payments for North American Medical/Dental Tourism in LatAm?

James Smith: Yeah, and about the positive impacts, one of the things we talked about off-the-air before we aired today's show was regarding the potential for the medical and dental tourism to LatAm, primarily to, I'm thinking Mexico and El Salvador. Partly because of all the positive changes happening in El Salvador, the country's reputation for safety is growing and more people from the United States would be willing to go there [for medical or dental treatment]. Now, you mentioned that I think Unalivio is not licensed to serve people who are U.S. citizens residing in the United States at this time. Is that correct?

Ernesto Contreras: Yeah, we started because of this issue that I told you. I've been working in crypto for seven years, but many of my friends, they were having problems saying, hey, I want to pay $30 for my family to go buy this thing and the fee is just crazy. Can you help me?

So, I was helping them out sending money using crypto and then I realized that this is a solution that that people need. So we started not by looking at this opportunity [of medical/dental tourism payment rails, but when you mention it, I was thinking that that's probably a very big opportunity. And a quick side note--when you've been talking about you know Americans trying to move South [of the Border] and vice versa it's really interesting, because i know a lot of Venezuelans that have migrated to the U.S. in the past five three years and personally, I live in the south of Mexico close to Cancun. And it's full of Canadians and Americans that are actually moving out of the USA. So it's really interesting to see this play out how some people are really eager to move to the North and other people are saying well now I should move to the South. So it's interesting how we're all seeing the world differently.

On the Repat Market as Some U.S./Canadian Citizen Mexicans and Venezuelans Return to their Homelands

James Smith: Yeah, we call that, by the way, we call that the Repat market or the Repatriation Market where you have Venezuelans who maybe have done very well for themselves in the United States, but maybe their kids are reaching a certain age or their parents are getting older [back home]. Or they're looking at their wealth and they're saying to themselves, well, okay, maybe Venezuela is not where I want to go back to, but maybe I want to look into getting a residency in Mexico or in a place like El Salvador, where I feel that there is stability and, you know, there are English-speaking schools for the children. I know, in Mexico City and in Monterrey and the major Mexican cities [such as Guadalajara]. So, you can get a very high-quality education there for your children.

And they're thinking to themselves, you know, hey, I'm seeing some of the same problems [inflation and associated socialist Leftist/oligarchic politics] that I left Venezuela to get away from that are starting to follow us, the United States, and it's not that…I was talking to Andres about this last week. You know that in terms of the inflation that’s rising in the U.S. that you can't compare it yet to what's happened in Venezuela, because the United States still has the luxury of the world reserve currency. The dollar still circulates overseas and there's still robust demand for its overseas, but that's partly what's propping it up. You know, sort of like Venezuela, they had the oil resource for so many decades [to prop up the Bolivar]. I think at one point in the early 1980s, probably Venezuela was like the richest country in Latin America, maybe in terms of per capita income.

Certainly, Caracas was one of the richest cities [in South America]. But you look at it now and I think, you know, there are some similar problems, and a lot of Latin Americans are thinking to themselves, they've already got the American passport, they naturalized as U.S. citizens, and they're thinking to themselves, “Maybe it's time to consider returning south to be closer to nuestra familia or to be...in a place where they or their kids can simply own and afford a better lifestyle, even being moderately affluent, as opposed to what it would cost to have the same standard of living in Los Angeles or New York City or in Miami or Tampa Bay [which have experienced the fastest rising housing costs since 2020]. Places like the greater Washington, D.C. area [especially in the Virginia suburbs] where prices have skyrocketed, even [housing in] Texas is no longer cheap. I think this is one of the big problems that Texas has right now, is that the employers and a lot of people still have this misconception that it's a cheap place to live [leftover from 20 or 30 years ago] and it's not [so they offer lowball salaries to people looking to move to Texas].

So, yeah, that's part of what's going to drive this continued trend [of reverse migration by affluent to middle class people to LatAm]. As you said, some people going North for opportunities, especially education or connections, getting connected as entrepreneurs and a growing number of Americans going South and saying, “You know what? I can do my job from Zoom or I can run my business more remotely [from Mexico]. I can find a way to reduce my overhead by living in Latin America. And, you know, as long as I keep my expectations realistic, that this is not going to be like the way things were in Miami, but nonetheless, I can have a pretty decent life here…” then people are going to keep doing that. And that's why we founded Exit Strategy World in October of 2023, because we saw the trend and the Repat trend was one of those I wrote about in my first blog posts about the future of this business and one of the reasons why I founded the company, I mentioned the Repat market.

One More Note on Medical/Dental Tourism to LatAm

So I'm glad you brought that up Ernesto and certainly you know after this show is over today we'll be keeping in touch. And we'll be talking about you know for the future certainly the opportunity that is there, if you had somebody like you know a company like Unalivio that has established relationships with proven providers of you know, cosmetic dentistry, it could be veneers, it could even be endodontics, you know, something that's not super urgent, like removing of wisdom teeth or something like that, but it's something that people know they need to do.

They can do it for a more affordable cost in Mexico City or in San Salvador, if they can fly down and get it done on a weekend or during a week where they can spend time in a nice resort area and recover…that's a potential very lucrative industry for the long term, because dentistry and the cost of a lot of services in the United States has just simply gotten too high.

I'm certainly not saying just strictly in the elective sense, but just overall. uh introducing a little bit of global competition would probably benefit people on both sides of the border to moderate the prices a little bit.

More on Medical Services and Retiree Magnets in Mexico

Ernesto Contreras: Yeah definitely and like I told you um I've seen in the Cancun area a lot of international clinics. I actually heard of a guy I didn't meet him but this person is a doctor that treats cancer patients and the guy bought a big house and he provides full treatment to some of his patients with people flying in from especially Canada and the US to get treated and, you know, the full diet and everything. And I'm not suggesting someone to do that. But what I'm saying is that this already exists [medical tourism]. And I wrote to you on the chat when we were talking about the migration town close to Guadalajara, that's called Ajijic. This is here in Mexico.

I don't think that this people moving South to leave their retirement is new, I just think that probably now there's more people aware that this is a possibility…

James Smith: …and because of the internet because of YouTube.

Ernesto Contreras: and because of programs like you but if you Google [search] Ajijic that's a town next to a Lake [Chapala] outside of Guadalajara [in Jalisco]. And it's full of U.S citizens, my ex-boss from Guadalajara was telling me that back in the day, if you had a lot of money in the US, you would retire and go to Miami or San Diego. But if you didn't have so much money, you probably went to Ajijic because yeah, with your 401k or whatever that amount was, you could afford a much better life in Guadalajara.

So, what I see or what I hear when I hear people like you is that you're not just looking at Ajijic, but you're exploring the [rest of the] world. And that's one of the reasons why I wanted to come here [on the ESW show] and share my learnings and learn from you, is because I think that you, a group of smart guys, showing the world that there's possibilities and more things to do outside of the U.S. But also, I like that you guys are raising your voice and telling your government and the people that they're supporting that, you know, “You guys should change what's not correct, so the course can be corrected.” And because, yeah, we should all fight to improve our places, our countries, and know that living [in one place accepting all the problems] is not the only option. We should always raise our voice and figure out how we can support and put our building blocks for a better future of the generations that are coming. So that is something that I applaud and that I support as much as I can.

Why We Created ExitStrategy.World and Trademarked the Slogan, Create Your Own Free World

James Smith: Definitely. And that's what we're all about at ExitStrategy.World. Our slogan actually that we've trademarked is, Create Your Own Free World. We don't believe that the free world is defined today by blocs anymore or even particular borders. It's defined and I think [the late Russian dissident writer] Alexander Solzhenitsyn said it best, when he said that the line between good and evil runs through every human heart. And there are no bad countries. There are no bad peoples [not Russians, Chinese, North Koreans or Iranians in the ‘Axis of Evil’]. There are [definitely] bad governments. There are bad oligarchies. There are bad power structures.

If you happen to be a Christian, you believe that there are forces of Evil in the heavenly realms that rule particular geographic fiefdoms of our visible world [powers and principalities spoken of in the Book of Daniel in the OT and in the NT as well].

But there is no free world anymore in the classic, let's say, [last] Cold War sense where you had a Berlin Wall running down through this Iron Curtain, one running down through Europe. And it was very easy to delineate where people wanted to go for freedom versus the countries that had to keep their people sort of locked down and prevent them from leaving [fleeing East Germany and the Communist Bloc]. Whereas now you have a situation where some of the people that claim to be championing freedoms or fighting for freedom are the ones trying to shut down free speech on the Internet, are the ones trying to censor things.

A Few Thoughts on Freedom and Censorship as Well as Globalist American Empire

We've got the big controversy with Elon Musk and the Australian government this week…and I'm not saying Musk is right 100% or the Australians [in government] are 100% wrong. They have a right to regulate violent content on the Internet within their [Australian] borders, but they're trying to externalize their rules to in an extraterritorial [globalist] way, similar to what the United States has done with using its exorbitant privilege of the world reserve currency the dollar to armtwist people, and get other governments to do what they want around the world. And people [not only abroad but in the U.S. itself] are starting to say that's a bad thing. A lot of Americans like myself are saying that's not even a good thing for the American people anymore, it's not even a good deal for us living here in the [North American] homeland because, so much of our resources have been spent trying to run this worldwide empire, running military bases in dozens and dozens of countries around the world.

While our main streets, while our infrastructure has visibly suffered in places like East Palestine, Ohio [where the chemical derailment happened poisoning townspeople], in places where the, you know, the bridges have fallen down and things like that in Baltimore [Maryland] and what's going on and so forth.

So, I really appreciate you coming on the program, Ernesto. And I want to extend an invitation to you to invite some of your friends and fellow entrepreneurs who are working on similar things in Latin America. We are all about solutions here and people who are building things for the future and finding consensus, finding common ground across borders, across nations and across cultures.

On the Coming Gray Wave of Eurozone Retirees Retiring to Egypt and Lebanon

For example, one of the reasons we have a Middle East, North Africa editor who's based in Cairo, Egypt, who happens to be a Muslim guy, an Arab guy, is because we see Egypt not only as a place with a very proud ancient civilization, but it has very high potential for the European retiree market. A lot of European pensioners who will have fixed incomes but are going to find it hard to make ends meet in Europe [with their euro-denominated pensions], could have a very nice life if they move to Egypt for many years in retirement, before they need to return back home for health reasons.

I mean, there's a lot of things a lot of opportunities out there, very similar to what we're seeing with Americans going to LatAm, that you could see more Europeans going to Egypt or going to Lebanon and living by the [Mediterranean or Red] seas and having a pretty decent life there [in the Near East] on their EU pension. So, this is why we created ESW and why we're very glad to have had you on the program. And like I said, we are extending, maybe we'll have you back on the program in a few months to talk more about what you've been working on, the development of Unalivio. And certainly, you know, having other entrepreneurs you may know on the show, the door is wide open. You know, we're extending the invitation to have them come on the program in future weeks and months.

Closing Thoughts for the Tuesday, April 23, 2024 Program

Ernesto Contreras: Yeah, yeah, for sure. So, thank you, James, for the opportunity, for the amazing chat. I can tell when a conversation is going smoothly and you're enjoying it because you know we covered so much, but I feel that you know we could talk here for a few more hours which I would but, it's getting late here and I just need to finish a few more things. So yeah this is this has been an amazing opportunity [to connect on the show] and you know kudos to you and cheers to all the team [at ESW] and everyone that's striving to make the world more free, to show people that they have more options and to enable people through technology, through education and through, you know, sharing the good news on how they can live a better life, which is at the end of the day, what we all want, you know, for us and for our families and for our countries.

So it's great to be here and I'll take you up on that offer and I'll find you a couple of more entrepreneurs that you can speak with and they can share more of their view on how this world is more free, how the world changed with all of this technology and, you know, the old incumbents are starting to realize that, you know, they [the Powers That Be] can't stop crypto. They can't stop people moving [for better opportunities]. They can't stop the new media [on the Internet]. They can't stop people sharing their point of view. So, it's a new world and we have to take our part of it.

James Smith: Excellent. All right. Well, excellent show, Ernesto. You've been a great guest and this has been a very good conversation. And I think with some deep and profound answers that certainly, like I said, I, as a webcaster have been working on just giving the guests, just letting them roll with it, you know, and being a little bit more like Joe Rogan and some of the other most popular hosts and letting the guests really expound their thoughts.

So I wanted to thank you again for coming on, I know it's getting late there in Dubai and maybe you've got a few people to say hello to before you say good night. So thank you again and we'll be seeing you very soon.

Ernesto Contreras: Yeah and with that, while wearing my Bitcoin t-shirt, I wanted to say thank you and thank you for ever to everyone that that tuned in [to this show], we will talk soon again, bye.

James Smith: Hasta luego, bye.

Ernesto Contreras: Hasta luego.