Blockchain, Cryptocurrencies, Global trends, Government activitiesJuly 9, 2016

Uber has found a clever way to bypass a roadblock in Argentina involving bitcoin

Uber is facing strong opposition in Buenos Aires, where the company has been operating since mid-April without a permit or tax-identification number. The massively funded startup is being sued by taxi unions. City officials have issued multiple injunctions attempting to bring its service to a halt. And credit card companies have been blocked from processing Uber payments on locally registered cards.

It takes more than that to stop Uber, however.

The ride-hailing company is working with bitcoin startup Xapo to circumvent the credit card roadblock, one of its more pressing barriers to service in Argentina. Xapo helps consumers buy, store, and spend bitcoin, a virtual currency. One of the ways it does this is with the Xapo card, a Visa-branded debit card that allows its holders to spend their bitcoin with any merchant who accepts Visa.

That Xapo’s card uses bitcoin is beside the point to Uber in Argentina. (In fact, the company said in a statement that it does not accept bitcoin as a currency.) What matters instead is that the card isn’t issued locally, but out of Gibraltar, and therefore not blocked from accepting Uber payments under the city’s regulations. By the same logic, someone traveling to Argentina with a US-registered credit card should have no trouble booking and paying for an Uber in Buenos Aires.

That said, the Xapo card does offer a unique solution to a related problem for would-be Uber riders in Buenos Aires—how to get a non-locally issued card. “A normal Argentinian person cannot go and suddenly open a bank account in Gibraltar,” says Anni Rautio, who is based in Argentina and heads up Xapo’s debit card. But because Xapo’s card uses bitcoin, which is digital and not controlled by any country’s central bank, it can provide cards to account holders anywhere. (Bitcoin is being used for settlement purposes on the backend; the important thing for Uber is that the transaction is on Visa’s network.)

“All they have to do is set up their Xapo and receive it at home and it’s ready to use,” Rautio says. “This is a very specific situation with a very specific problem and a very specific solution.”

Uber declined to provide data on how many people in Argentina have signed up using Xapo’s debit card, but said it is currently doing about 18,000 trips a week in Buenos Aires. Rautio said Xapo has received “a lot of requests” from Argentinians about setting up a Xapo card now that they’ve “found an actual use to spend [their] bitcoins.”

First appeared at QZ