Is there any benefit of being treated as "professor" by students and admin? I just joined a faculty as assistant professor, at a university in South America. The admin team and students treat me as "professor". Moreover, because the official language is Spanish, people refer to me as "usted" instead of "tu" (see difference here). 

Just coming out of the PhD, and feeling still "young", I find this treatment very odd. I would like to be treated, particularly by students, by my first name.

Now, without trying to foster authority styles, or exercise power, or being pedantic, I wonder whether there is an actual "benefit" in keeping this formal relationship? For instance, perhaps it gives me more capacity to extract effort from students? Diluting the boundaries might give them confidence to go against my instructions or so. And yet, conversely, someone might argue that a more friendly approach can actually help me gain confidence with students, understanding more their interests and motivations.

In the end my question is what are the pros and cons of each approach, based on your experience. Any help is more than welcome.
A certain amount of separation from your students has value. You have some power over their future, for example. The use of usted implies respect as well. This is useful if any conflicts arise in the future where you need to take a role of authority. 

But, having a friendly and open relationship with your students is also useful if it gives them the "permission" to seek you out for help when they need it. Mostly I'm thinking of academic help. Even if they have personal problems (health, family,...) it is useful to them to know that you understand difficulties that may affect their performance. You can encourage them in such situations. 

Sometimes you need to be understanding. And sometimes you need to speak somewhat strictly. Both can advance their educational pursuit. Less frequently you need to speak with full authority. Don't make that impossible, should the need arise. 

So, a small gap is useful, and too wide a gap is probably not optimal. There are some students who will try to take advantage of you (e.g., by trying have you change grades) if you seem too much like "one of the gang". 



Note that I was always Dr. Buffy or Prof. Buffy to my undergraduate and even MS level students. But with doctoral students I (and my colleagues) more or less insisted on first names. But the expectation was that they had achieved the status of colleagues at that point and we wanted them to think that way.