UNIVERSIDAD ESAN

FACULTAD DE CIENCIAS ECONÓMICAS Y

ADMINISTRATIVAS
Carrera de Administración y Finanzas

Marco Alvarez – 14101112

Jean Paul Cisneros – 14200258
Edwin Curahua – 13100743

Professor: Edmundo Lizarzaburu

Section: S-002

Lima 2 de octubre del 2018

Work Structure

1. INTRODUCTION 2
2. MILA 4
3. Operation of the Latin American Integrated Market 5
4. MILA Numbers 7
Total Volume Negotiated in MILA Markets 7
5. MACROECONOMIC ANALYSIS 7
a. PERU 7
b. MEXICO 10
c. CHILE 12
d. COLOMBIA 13
6. BITCOIN 16
8. Bibliography 20

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1. INTRODUCTION
Many people claim to be against globalization because, according to them, it is taking
away an opportunity for developing or underdeveloped countries to compete in the world
market, mainly Latin American countries. But the reality is different: globalization is benefiting
us all because globalization has always offered opportunities to many people around the
world in the economic and social field, such as: Cost reduction, higher quality products and
economies of scale.

Currently, there are more than 250 regional trade agreements in place, accounting
for more than half of international trade; this as result of the intensification of movement of
goods and services, financial capital, and knowledge around the world, thus increasing
economic interdependence between countries.

More countries, sectors and companies are reaching out to its neighbors to create
alliances that allow them to be more competitive in the international environment; this in the
need of leaving their traditional schemes of operation behind and immersing themselves on
the global market by integrating its operations (Yepes-Rios, 2015).

Integration accelerates the growth of the economies of the countries, have a support
in times of crisis and achieve decreasing transaction costs, but is a gradual process and
takes many years with occasional reversal (Lizarzaburu, 2015). It requires major reforms in
the financial sector, securities, economic and political processes and the ability of foreign
investors to make direct investments.

Investors, who are looking for better profitability opportunities for their money, are not
oblivious to these benefits, and seek opportunities in various countries. That is why various
governments sign economic integration agreements to encourage foreign investment and
regulate financial markets for purposes of transparency and protection.

However, regionalism or the emergence of economic blocs has been a feature of the
world economy since the mid-nineteenth century. There are also different forms of integration
such as preferential trade agreements, free trade zones, customs unions, common markets,
the single market, economic union and monetary union.

In Latin America the word integration goes back many years, such as the Latin

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American Free Trade Association (alalc); created on February 18, 1960, whose purpose was
the creation of a free trade zone that would come into operation as of December 31, 1972,
but never reached the goal for which it was created. In the year 1980, the (alalc) was replaced
by the Latin American Integration Association (aladi), which was integrated by the eleven
countries that made up the (alalc), after which the countries of Cuba (1999) and Panama (
2011). The lack of concrete results with an agreement or integration treaty was not taken into
account despite the fact that multiple shortcomings in the integration process had already
been evidenced, since later new initiatives came. The projects multiplied, creating the
following agreements: sela, can, Mercosur, 10 alba, celac, Unasur, otca, sic, mcc, cc, etc.

Within this context, Chile, Colombia and Peru have called the attention of worldwide
investors during last years. The combination of improved public institutions related to finance
and the reduction of barriers of capital movements have increased the flow of inward
investment, and thanks to the greater dynamism of their economic activities, the deepening
financial markets and solid results of stock markets have introduced these markets in the
global investment map.

The Latin American Integrated Market MILA is the result of the agreement signed
between The Santiago Exchange (Chile), The Colombia Exchange and The Lima Exchange
(Peru), which, since 2009, began the process of creating a regional market for the negotiation
of equity securities from the three countries. After several months of joint work in which the
main actors of the three markets and the governments of each country participated, on May
2011 MILA began its operations.

The objective is the creation of an integrated equity market that is attractive to local
and foreign investors, as it is a broad market where they can diversify their investments (Uribe
Gil, 2014). It was the first market using virtual integration to combine markets in different
countries to facilitate international transactions, within each independent market.

On July 2014, the incorporation of Mexico into the Mila became official and S&P
launched the S&P MILA Pacific Alliance family of stock indexes, which is responsible for
measuring performance of the shares traded in the MILA in its entirety.

In this study we will first present the risk related to this emerging markets, then present
a more detailed analysis of the benefits that bring market integration, how does the process
develops, and past experiences on integration. After this, we will focus on the functionality of

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the MILA, some numbers around its status and some proposals for strengthen it. Finally, the
impact and evolution regarding this countries.

2. MILA

Interest in stock market integration arises because an integrated regional stock

market is more efficient than segmented national capital markets. With an integrated regional
stock market, investors from all member countries will be able to allocate capital to the
locations in the region where it is the most productive. With more cross-border flows of funds,
additional trading in individual securities will improve the liquidity of the stock markets, which
will turn lower the cost of capital for firms seeking capital and lower the transactions costs
investors incur. These suggest a more efficient allocation of capital within the region.

According to Click (2005), investors from outside the region will be more attracted to
an integrated market, finding investments in the region easier or more justifiable. In addition,
rather than dismissing a collection of small national exchanges, they will take notice of the
regional stock exchange; making the whole market greater than the sum of its parts. Thus,
an integrated stock market may help link the region with the world stock markets and bring
more capital into the countries from abroad.

Main Benefits:

● For the investors, they have more options on financial instruments and the possibility
to create new portfolios. It also increases the possibilities of investments, leading to
a reduction on volatility. In addition, it gives access to stock markets with strong
presence of well positioned issuers.

● For intermediaries, they will find a higher amount of types and number of products to
distribute to their clients and the possibility to create new investments vehicles.

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 ● For issuers, it provides the access to a wider market, thus reducing their cost of capital
and expanding the demand for their financing, bringing the attention of a greater
number of investors.

● For the member countries, it supports their economic integration process and brings
a greater competitiveness in the region.

The level of financial market integration has been increasing over the last years due
to several factors, including the search for higher returns for investments and diversification
of risk in international markets, driven by investors; the effort of lots of emerging markets to
foster foreign capital inflow, removing and reducing restrictions and controls on capital inflow
and outflow; the deregulation of financial markets; and finally, improving the ecosystem and
growth prospects by implementing free market oriented reforms (Lizarzaburu, 2015).

3. Operation of the Latin American Integrated Market

The Latin American Integrated Market MILA is the result of the agreement signed
between The Santiago Exchange (Chile), The Colombia Exchange and The Lima Exchange
(Peru), which, since 2009, began the process of creating a regional market for the negotiation
of equity securities from the three countries. After several months of joint work in which the
main actors of the three markets and the governments of each country participated, on May
2011 MILA began its operations.

MILA is the first integrated market executed worldwide without merger or corporate
integration (BVL, 2013). This form of integration is possible due to the use of technological
tools and standardization of regulations on capital market trading and custody of values
among the three participating nations (MILA, 2013). Some authors did focused studies
(Lizarzaburu, 2015).
For the Major Investors alternatives of financial instruments. The possibilities of
investment are extended. Possibility of creating new portfolios for distribution to local clients.
Access to stock markets with strong presence of issuers positioned in the mining sector in
Peru, retail and services in Chile and the financial and energy sector in Colombia, which
allows the construction of diversified portfolios. For Intermediaries Integration encourages

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more attractive and competitive stock markets Increases the type and number of products
to distribute to its customers and enables the creation of new investment vehicles New
portfolios diversified by sector, according to the type of issuers that each stock has .
Strengthens the sector technologically by replicating international standards For issuers
Reduction of capital costs Access to a broader market from its local market Expansion of
demand for its financing by attracting the interest of a greater number of regional
comparative investors with their peers, improving competitiveness The Country Support the
integration process of our economies Greater stability in the rules of the game To be much
more competitive in the region.

The orders of a market are routed from the corresponding local broker to the stock
market objective, under the responsibility of the foreign intermediary, for example: if a
Colombian intermediary wants to buy Peruvian shares resorts to its commission agent of
Bolsa (broker) Colombian and this enters the order that is routed to the Lima Stock Exchange
under the responsibility of a Peruvian SAB. For this it is necessary that said brokers
previously have an agreement of corresponsalía that allows them to reach the other market.

One of the most important characteristics at organizational level is that this

integration does not deprive any market of its regulatory independence or autonomy
Nevertheless, shared and growth in an integrated market is foreseen in a more increasingly
standardized framework. It is vital to highlight that regarding MILA effectiveness, (Molina
Castilla, N., Pabón Gutiérrez, J. D., Patino, ~E., & Alonso, M. -2012) state that for this
integrated market to be effective, there must be a system that automatically lists foreign
securities which are registered in foreign stock markets and in public records of participating
countries (Lizarzaburu, 2015).

MILA operations aim to simplify and improve the efficiency of share negotiation
between investors of the three integrated markets. Every negotiation is made using the local
currency of the investor's country or foreign currency, in the event that it is the currency in
which the instrument is referred to, and with account entries through a local intermediary
using a technological tool.(Lizarzaburu, 2015).

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4. MILA Numbers

According to the Bulletin of the Central Securities Deposit, These are the figures as
of December 31, 2017, where the participation (in one billion dollars) of the 4 members is
shown:
Chile (31.73%), Peru (10.61%), Colombia (13.08%) and Mexico (44.59%)
You can also appreciate the volatility of the different indexes related to the MILA and
their respective variations. (MercadoMILA 2018)

Total Volume Negotiated in MILA Markets

Next, the table indicates the value of the negotiated volumes of the MILA (segmented
by countries) both in the current month (December), previous month (November) and
throughout the year (2017).

We realize that the negotiated amount for the month of November to December has
decreased by almost 9%, with Peru being the country that has shown the greatest fall in its
volumes (Many factors intervened, politicians among them).
Highlight Chile, which shows the highest growth (20.9%) compared to the previous month.

During 2017, transactions between correspondent brokers of the Latin American

Integrated Market were carried out for a total amount of USD $ 123,024,833, which means
an increase of 168% in relation to the amounts negotiated in the infrastructure during the
year 2016. On the other hand , the S & P MILA Pacific Alliance Select index had a profitability
of 23.47% during 2017, reflecting the positive profitability of the stock indices in the region.
(MercadoMILA 2018)

5. MACROECONOMIC ANALYSIS
a.PERU
So far in the 21st century, the Peruvian economy has presented two distinct phases of
economic growth. Between 2002 and 2013, Peru distinguished itself as one of the most
dynamic countries in Latin America, with an average GDP growth rate of 6.1% per year. The
adoption of prudent macroeconomic policies and wide-ranging structural reforms, in a
favorable external environment, created a scenario of high growth and low inflation. Steady
growth in employment and income significantly reduced poverty rates. Poverty (percentage
of the population living on less than USD5.5 a day) fell from 52.2% in 2005 to 26.1% in 2013,

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which is equivalent to saying that 6.4 million people ceased to be poor during that period.
Extreme poverty (those who live on less than USD 3.2 a day) decreased from 30.9% to 11.4%
in that same period.

Between 2014 and 2017, the expansion of the economy slowed down to an average of 3.1%
per year, mainly as a result of the fall in the international price of raw materials, including
copper, Peru's main export product. This generated a contraction of private investment, lower
tax revenues and a reduction in consumption. However, two factors attenuated the effect of
this external shock on the product, allowing that, although more slowly, the GDP continued
to increase. First, the prudence with which they had handled in previous years both fiscal
policy and monetary and exchange. This made it possible, on the one hand, to cope with the
fall in tax revenues without drastic adjustments in spending, and on the other, to have
international reserves to facilitate an orderly management of the exchange rate. Second, the
increase in mining production, due to the maturation of projects developed during the boom
years, which boosted exports and counteracted the slowdown in domestic demand. In this
context, the current account deficit decreased rapidly from 4.8% of GDP in 2015 to 1.1% in
2017. Net international reserves remained at a stable level and, by August 2018, amounted to
27% of the PBI Average inflation stood at 2.8% in 2017, within the target range of the Central
Bank.

As part of the adjustment, in recent years the fiscal deficit has been increasing and closed at
3.1% of GDP in 2017. The largest deficit is the result of a decrease in revenues due to lower
export prices and the economic slowdown , and an increase in recurrent expenses during
recent years, especially in the case of goods and services and salaries. Despite this, with 23.7%
of GDP, Peru's gross public debt (net) remains one of the lowest in the region.

For 2018 a rebound in GDP growth is expected at a rate of around 4%, driven by a recovery
in domestic demand. On the one hand, the higher prices of raw materials have been translated
into a new wave of mining investments. On the other hand, it is expected that the increase in
business confidence, the increase in credit acceleration placement and the greater creation of
formal jobs will support private consumption. In addition, public investment has accelerated
due to a better execution of fiscal spending. In the medium term, growth is expected to remain
close to 4% per year. Likewise, the process of fiscal consolidation would allow a convergence
of the public deficit towards a level of 1% of GDP in 2021.

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Growth projections are vulnerable to external shocks such as a fall in commodity prices or an
adjustment in international financial conditions. Some events that could trigger these effects
are an escalation of protectionist measures in the commercial sphere, a slowdown in China's
growth or greater uncertainty about the financial viability of other emerging economies. In
addition, the economy is exposed to natural risks, including recurring climatic phenomena
such as El Niño. Faced with these risks, the Peruvian economy has established monetary,
exchange and fiscal cushions that would mitigate its effects.
The Systematic Country Diagnosis for Peru has been completed, as well as the Country-
Country Partnership Framework (MAP) covering the period of FY17-FY April 21, 2017. The
MAP had a series of consultations with the sectors public and private, as well as with civil
society organizations as part of their preparation process. The MAP responds to the
Government's program and to the priorities indicated in the Diagnosis, consequently it focuses
on three pillars: I. Productivity as an engine of growth; II. Services for citizens throughout the
territory; III. The management of natural resources and the risks of climate change.

The World Bank seeks to support Peru in addressing the three previous areas, given the
extensive experience in the country acquired through past and ongoing interventions.

It is likely that during the execution period of the MAP, the program's emphasis shifts from
financing to knowledge.

The existing portfolio of the International Bank for Reconstruction and Development (IBRD)
consists of 15 investment projects for US $ 894 million and five donations for a total of US $
17.40 million. Additionally, Peru has access to contingency credit lines for US $ 2.6 billion.

IFC's active portfolio of US $ 458.44 million works with 19 institutions in the country. The
active portfolio of the Multilateral Investment Guarantee Agency (MIGA or OMIGI) includes
a contract with gross exposition of US $ 6.2 million in support of the Lima International
Airport concession.

The World Bank carried out a series of studies, evaluations and systematizations. He
published the report "Promotion of the scale and density of the networks of agents in Peru to
contribute to the decision-making processes on issues of social inclusion. Presented the report

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"Taking momentum in Peruvian agriculture: Opportunities to increase productivity and
improve the competitiveness of the sector" that summarizes the transformation that has been
experiencing agriculture and the food system, assesses the recent performance of the
agricultural sector with a productivity analysis and competitiveness

Regarding human development, he presented "Given the Size: Peru's success in the fight
against malnutrition" which, as in less than ten years, Peru managed to reduce drastically-
from 28% in 2008 to 13% in 2016-its high rate of stunting among children under 5 years of
age.

Other knowledge products include "Peru: Following the path of success. Productivity to boost
economic growth "and the policy note," Peru towards an integrated system of cities: A new
vision for growth ". It is hoped that this document will stimulate the discussion on the
development of an integrated system of cities for Peru as a governmental vision that in the
medium term could serve as a focal point for sectoral policies. Also, as part of the series of
Policy Notes, 27 short notes were published

b. MEXICO
The growth of the Gross Domestic Product (GDP) was reduced to 2 percent in 2017 as the
uncertainty of the ongoing renegotiations of the North American Free Trade Agreement
(NAFTA) and the electoral process, decreased investment. The significant adjustment of
fiscal and monetary policy in recent years also weighed on domestic demand. Private
consumption, however, has remained reasonably well despite the drop in real wages
associated with an increase in inflation in 2017.

A strong recovery in foreign trade created a strong contribution to GDP growth. The increase
in external competitiveness derived from the accumulated depreciation of the peso and the
strengthening of industrial production in the United States have strengthened Mexican
exports.

The transfer of the depreciation of the peso to inflation gained strength in 2017 and together
with the liberalization of gas prices and an increase in the excise tax on fuel helped raise
annual inflation to 6.8 percent by the end of 2017, the highest level in 16 years. This led the

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Central Bank to resume its monetary adjustment cycle at the close of 2017 and the beginning
of 2018, leaving the monetary policy interest rate at 7.5 percent by the end of February 2018.

With the help of a significant contribution of the Central Bank's profits, amounting to 1.5%
of GDP, the public sector achieved a primary surplus and comfortably fulfilled its 2017 deficit
target. This was enough to put the debt / GDP ratio on a descending path. In the coming years,
it is likely that the country will continue to record primary surpluses, reaching the global
deficit target of 2.5 percent according to the fiscal rule. This should be enough to marginally
reduce the debt / GDP ratio.

As the political uncertainty related to the NAFTA renegotiations and the electoral political
cycle subsides, the growth in investment is expected to accelerate from the end of 2018
onwards. This should support a rebound in economic growth during the forecast period
towards its long-term potential rate. The implementation of the energy reform has been
successful in attracting private participation to the sector and it is expected that the downward
trend in investment and production in the oil sector will be reversed, boosting the potential
growth of production.

Except for a greater depreciation of the currency, inflation is expected to moderate during
2018 to approach the Bank of Mexico's upper tolerance band of 4 percent by the end of the
year and the target rate of 3 percent during 2019. This should be allow the Central Bank to
relax monetary policy, at least in relation to the United States, from the end of 2018 or the
beginning of 2019, thus helping to prop up a resurgence of investment.
The Strategic Country Alliance (AEP) with Mexico, which comprises the fiscal years 2014-
2019 -produced jointly with the government- established a participation based on proposals
for solutions for development through a selective and tailored package of instruments that
integrate financial services, knowledge and convening of the World Bank Group. It focuses
on the dual objective of the World Bank Group - eradicating extreme poverty and promoting
shared prosperity - and is fully aligned with Mexico's National Development Plan (NDP) for
the period 2013-18. The four key areas of activities are:

· Boost productivity;

· Increase social prosperity;

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· Strengthen public finances and government efficiency; Y

· Promote green and inclusive growth.

The Bank's financial cooperation focuses on social protection and educational programs, from
early childhood development to the upper secondary level; a green and inclusive growth
agenda integrated by energy, environment, water, agriculture and transport projects and
financial inclusion programs. At the end of March 2018, the active portfolio consists of 17
projects (including four independent projects of the Global Environment Facility, GEF) for a
total of approximately US $ 2,500 million in net commitments. This includes four projects
approved by the Board during fiscal year 18 for US $ 406 million: Project for the
Strengthening of Enterprise in Forest Productive Landscapes (US $ 56 million), an Additional
Financing of the Social Protection System Project (US $ 300 million), an Additional
Financing operation for the energy sector (US $ 50 million IBRD + US $ 5.8 million GEF)
and a GEF project, Sustainable Productive Territories Project (US $ 21.9 million).

The Bank has a portfolio of donations of approximately US $ 291 million, comprising around
47 active projects in support of activities in the areas of environment and energy. This
portfolio includes, among others, a large project of the Clean Technologies Fund (US $ 200
million) implemented in conjunction with the national Urban Transport Transformation
Program; two funds from the Forest Investment Program (US $ 42 million) and a Dedicated
Grant Mechanism for Indigenous Peoples and Local Communities in Mexico (US $ 6 million)
recently approved to strengthen the capacities of people dependent on forests through a
donation executed by beneficiaries. The World Bank Group also supports Mexico through a
strategically aligned knowledge program. Timely contributions have been made in areas such
as climate change, urban development, water and transport, among others.

c. CHILE
The Chilean Commissioners are the strongest of the group of members of the MILA, which
is demonstrated by the balances of the year 2010 that show that the total of the Stock Exchange
Commissioners of this country have a wealth superior to USD 1,397 million.
In the Chilean case, the benchmark index showing the evolution of the stock market is the
IPSA, which is formed by selecting the 40 companies with the highest amounts traded on the

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Santiago Stock Exchange, weighted quarterly, and whose stock market capitalization exceeds
USD. 200 million. The Chilean market is the most diversified: 32% of the companies are for
services, 16% for commodities, 11% for retail, 9% belong to the banking sector and another
9% to the industry. It is undoubtedly the most evolved market of the members of the MILA,
with a stock market training of USD 230 billion and 236 companies listed on the Stock
Exchange.
The main Chilean actions are in the trade-financial sector, highlighting actions such as:
• Copec. Holding of Chilean companies that have specialized in the forestry sector. Copec
Fuels and Arauco stand out, which work in the fuel sector. Copec acquired 25% of the Terpel
organization in 2010.
• Antofagasta. Company dedicated to the exploration and exploitation of metals, among which
copper stands out as a focus of operations.
• Falabella. Major representative in the large stores segment in Chile, with presence in other
Latin American countries such as Argentina, Peru and Colombia. The expansion plan of USD
1,500 million exceeds in a period of time that goes until 2012.
• Enersis. Entity with a large presence in power generation with a property of more than 60%
of Endesa Chile and 54% of Endesa Brasil. An important aspect that must be taken into
account is that at the end of 2010, the Chilean and Brazilian stock exchanges signed a joint
operation agreement, with which they seek connectivity between these markets, allowing the
distribution of stock market information and the development of new products between the
two markets. In this way, the Brokers of Brazil will be able to send intentions of purchase or
sale for the negotiation of Chilean products and assets, and vice versa.

d. COLOMBIA

An initiative implemented by the BVC is that of the Colombian Global Market, through which
any Colombian investor can acquire shares abroad without having to comply with the
enlistment procedures.

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fuente Bolsa de Valores de Colombia (BVC)

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fuente Bolsa de Valores de Colombia (BVC)
A total of 22 European indicators, 12 United States indicators and 14 indicators in Asia and
South America are published in the week beginning on 10-29-18.

Eurozone: In the Eurozone this week the Eurozone Gross Domestic Product is published on
10/30/18, the Eurozone Consumer Price Index on 11/16/18, the Eurozone Employment
Report on 10/31/1910 / 18, the Gross Domestic Product of Spain on 10/31/18, the Consumer
Price Index of Spain on 10/30/18, the Retail of Spain on 10/30/18, the Product Gross Domestic
Product of France on 10/30/18, the Consumer Price Index of France on 10/31/18, the Gross
Domestic Product of Italy on 10/30/18, the Italian Consumer Price Index on 10/31/18, the
Prices of the Industrial Production of Italy on 10/29/18, the Business Confidence of Italy on
10/30/18, the Consumer Confidence of Italy on 10/30/18 , the Consumer Price Index of
Germany on 10/30/18, the Employment Report of Germany on 10/30/18, the Business
Confidence of Eurozone on 10/30/18, the Industrial PMI of Spain on d on 02/11/18, the
Industrial PMI of the United Kingdom on 01/11/18, the Industrial PMI of Italy on 02/11/18,

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the Current Account Balance of Spain on 10/31/18, the Meeting of the Bank of England of
the United Kingdom on 01/11/18, and finally the Consumer Confidence (GfK) of the United
Kingdom on 10/31/18.

6. BITCOIN

Currently, a boom has been generated in the digital financial world due to the existence
and proliferation of virtual currencies (Nakamoto, 2008). Bitcoin has had a boom important
in recent times, being one of the most digital currencies used worldwide, this due to the low
cost and low commission, the diversity of products or goods that can be acquired and,
especially for the possibility of change bitcoin to any real currency (dollars, euros, among
others). For these and other reasons bitcoin has been the most successful virtual currency.
Bitcoin is a virtual currency that was created in 2009 by Satoshi Nakamoto
(pseudonym of its author or authors), initially for the purpose of shopping online. Bitcoin is
an independent currency, decentralized and intangible, this means that it is neither controlled
nor backed by no governmental entity, financial institution, company or Bank. It uses
cryptography as a data protection technique, a P2P network, a system of nodes to avoid its
multiple use and the code protocol open (Yermack, 2015).
Bitcoins are generated on the internet by any user, using programs free called miners
or bitcoin miners. Like any transaction financial, there must be a buyer and a seller
(Gringberg, 2012). For these transactions, bitcoins use cryptography as a security protocol, so
they must be establishing the public and private keys to be used by people involved in each
of them. Likewise, they must have a digital purse where you store your bitcoins, which must
also have protocols adequate security and protection.
These are some characteristics that make it really useful and different:
 It is decentralized:
It is not controlled by any State, bank, financial institution or company.
This does not mean that governments are eliminated (in fact, some have tried
to regulate their use), but they are not capable of imposing themselves.
Its "anarchic" functioning means that it is not possible to generate
inflation by creating more currency (as a country can do), but that the network
itself, through mining, manages the bitcoin emission in a decentralized manner
and always according to the demand real.

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 It is impossible to falsify or duplicate:
Thanks to a sophisticated cryptographic system that protects users,
while simplifying transactions. In addition to the network itself - already safe
in itself - users have their own purses, protected by themselves.
In this way, it can be guaranteed that bitcoin is only spent by its owners,
and for the specific operation they decide.
 No intermediaries:
Transactions are made directly from person to person. Its peer-to-peer
operation allows almost instantaneous transactions, with very low processing
costs.
 The transactions are irreversible:
It is one of the most outstanding features of Bitcoin. Once a payment is
made, it cannot be canceled. In any case, the receiver of the currency could
make a transaction back to the issuer. In the absence of an intermediary, the
return depends on the agreement reached between the two parties directly (and
that they are good people, of course).
Given this situation, alternatives have emerged for the confirmation of
transactions, such as different escrow systems that guarantee agreement
between parties during a trial period.
 You can exchange bitcoins to euros or other currencies and vice versa:
Like any other currency. Even in those places that allow it, you can pay
the indicated amount in any currency in its equivalent in Bitcoin (no, the
University of Alicante has not yet done so, this course requires a transfer).
 It is not necessary to reveal your identity:
When doing business and preserve your privacy. In this case, there are
as many pros as cons to total privacy in the use of bitcoin. This is one of the
main features that inspired the creation of Bitcoin.
 The money belongs to you 100%:
It cannot be intervened by anyone or the accounts can be frozen.

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 Depending on the optics with which the bitcoins are viewed, they may have
innumerable advantages or disadvantages, but what is certain is that the bitcoin is a very
attractive virtual currency, which in turn brings implicit risks potentials, which are mentioned
below:
 Currency volatility:
Bitcoins suffer increases and decreases in their value with very often,
because they do not depend on any market and, therefore, it can be considered
an unstable currency. Now, for being a currency digital, the security of it may
be one of the reasons why It fluctuates so easily. When there are attacks on
bitcoins ATMs, digital wallets or on the networks that protect the data of the
buyers and sellers, increases distrust of this instrument of payment affecting
its value. In the case of bitcoins savers, the worth establishing strategies to
change bitcoins to real currencies.
 Absence of regulatory laws for bitcoins:
For being a currency without any type of regulation, it is used with a
particular character. That is, for users there is no regulatory body that protects
the consumer, in case of that there is a problem in the transactions, there is no
way to place a claim or be protected in any law. For companies, the carry out
transactions with bitcoins, is generating significant gaps in your Control
Internal, because of the aforementioned absence of regulations, the
consequence Direct could be losses that directly impact the financial
statements and the reputation or image of the company.
 Anonymity of those involved in the transaction:
Although it is true that there are experts who indicate that users of the
bitcoin network can be identified, there are others that indicate otherwise.
What is known are the public keys that are handled in transactions. Also, in the
network of bitcoins stores the history of purchases and sales of currencies so
that a batch of bitcoins is not used for several payments, but the identity of the
users who perform operations on the network is not public, unless the same is
made known by the same user in question. By On the other hand, software
developments have already been carried out that allow the anonymity is a
principal condition of a transaction with bitcoins, for example the ZeroCoins.
 Inadequate protection of the cryptography keys used:

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 At the level of information security, backup and protection of it, so
Generally, it depends on the user that uses the information, the users are
responsible for the proper protection of the private keys used in the various
transactions and, in case of losing the keys, there is the possibility of do not
recover the funds in bitcoins.
 Experimental payment instrument:
For being a new means of payment and innovative, bitcoins are based
on active developments, therefore, no it is certain that they are maintained over
time, however, because of the boom it has had and because of the increased
use, the chances that the disappear day by day.
 Money laundering and black market:
The speed with which the transactions, lack of regulation, anonymity,
the number of bitcoins that exist today and global usage have made this
currency become very striking for tax evasion, money laundering, evasion
control change and any illicit transaction you wish to make. For the financial
and technological world, bitcoin has become a true innovation, however, there
is still a long way to go before become a legal and reliable currency, this will
depend on the course you take the same and of the actions that can be taken by
government entities and regulatory bodies worldwide.

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8. Bibliography
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Mercados Accionarios de Chile, Colombia y Perú en el Mercado Integrado
Latinoamericano (MILA). Innovar, 71-84.
● Asness, Clifford S.; Israelov, Roni & Liew, John M. (2011). International
Diversification Works (Eventually). Financial Analysts Journal, 67 (3), 1-23.
Bekaert, Geert & Harvey, Campbell R. (2003). Emerging markets finance. Journal of
Empirical Finance, 10 (1-2), 3-55.
● Chambet y Gibson (2008), Financial integration, economic instability and trade
structure in emerging markets, Journal of International Money and Finance, 27-4:
654-675.
● Chen, Firth y Meng Rui (2002), Stock market linkages: Evidence from Latin America,
Journal of Banking & Finance, 26-6:1113-1141.
● Diamandis, Panayiotis F. (2009). International stock market linkages: evidence from
Latin America. Global Finance Journal, 20 (1), 13-30.
● Gil, U., Jorge, M., & Mosquera López, S. (2014). Effects of the MILA in the efficiency
of the colombian, peruvian, and chilean stock market portfolios. Cuadernos de
Administración (Universidad del Valle), 30(52), 75-83.
● Lesmond, D.A. (2005). Liquidity of Emerging Markets. Journal of Financial
Economics, 77 (2), 411-452.
● Lizarzaburu, E. R., Burneo, K., Galindo, H., & Berggrun, L. (2015). Emerging markets
integration in Latin America (MILA) stock market indicators: Chile, Colombia, and
Peru. Journal of Economics, Finance and Administrative Science, 20(39), 74-83.
● Yepes R., B., Gonzalez T., K., & Gonzalez P., M. (2015). The integration of stock
exchanges: The case of the Latin American Integrated Market (MILA) and its impact
on ownership and internationalization status in Colombian brokerage firms. Journal
of Economics, Finance and Administrative Science, 20 (39), 84-93.

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