Cryoto Currency

DailyCoin reports that cryptocurrency trading in Latin America has increased by 40% year-on-year

Latin America sees a 40% increase in cryptocurrency trading year-on-year
  • Five Latin American countries stood out this year in Chainalysis’ ‘2022 Global Cryptocurrency Adoption Index‘.
  • High regional inflation, benefits from remittance payments and the general search to achieve higher financial returns were the catalysts for the increase in digital asset use.
  • Stablecoins are a haven of value and have been widely adopted in Venezuela and Argentina.

Cryptocurrency trading in Latin America grew 40% between July 2021 and June 2022, according to the ‘2022 Global Crypto Adoption Index’ published by blockchain analytics firm Chainalysis.

The 2022 ‘Geography of Cryptocurrency‘ report highlights that the region is the seventh-largest cryptocurrency market in the world. The total amount of cryptocurrency traded by residents during the study period was $562 billion.

Five Latin American countries specifically featured in the top 30 of the ‘Global Crypto Adoption Index‘, with Brazil leading the way in 7th place, followed by Argentina in 13th, Colombia in 15th, Ecuador in 18th, and Mexico in 28th.

The Chainalysis study found that crypto trading in Latin America was largely driven by three factors: its role as a store-of-value; its ability to send remittances more easily; and the search of better returns through portfolio diversification.

Latin Americans are trying, through stablecoins (and ), to protect themselves against rising inflation. According to data from the International Monetary Fund, July saw a 12% increase in the prices for goods and services in Brazil and Peru, Chile, Mexico, Colombia, and Chile. This is the highest level in 25 years.

Venezuela and Argentina’s Swift Stablecoin Adoption

The economic conditions in Venezuela, Argentina, and Brazil are extremely poor. Both countries are facing record inflation rates of 114% & 79%, respectively, and their currencies have suffered a progressive decline in value against the dollar over several years.

Investors of all sizes have turned to stable currencies as a safety net against inflation and devaluation. A Mastercard survey (NYSE:) released in June found that at most a third of those surveyed were using stablecoins for daily purchases.

The Chainalysis study also found that cryptocurrency is being used to pay remittances in Latin America. However at different levels.

Mexico alone is expected to see a remittance industry of $150 billion this fiscal year. $51.6 Billion of that amount was made with crypto via Bitso and other platforms. Many of those families who receive these payments come from the most socioeconomically disadvantaged areas of the country.

El Salvador is another country that regularly utilizes crypto payments for remittances through the government’s Chivo Wallet, which processed $52 million between January and May 2022. The decline of Bitcoin and low use of cryptocurrency as a payment for services has discouraged this format.

Brazil has been the most enthusiastic Latin American country in terms of the adoptoion of cryptocurrencies, with crypto exchanges, large banks such as Nubank, and multinational companies like Visa (NYSE:) and Mastercard launching a variety of cryptocurrency trading services for the nation’s retail market in 2022.

On the Flipside

  • Mastercard’s survey revealed that 86% Latin Americans surveyed would be willing to use alternative payment options such as QR codes, cryptocurrencies and biometrics to pay for their purchases, compared to 77% and 74% of Europeans.

Why You Should Care

  • Except for the Brazilian real and the Mexican peso, all Latin American currencies have seen a sharp devaluation in relation to the dollar this year.
  • These countries are facing a difficult economic situation that has led to an increase in adoption of cryptocurrencies and stablecoins.

You can find other articles on this topic at the following links.

Nubank launches its own digital token, Nucoin, as part of a strategic partnership with Polygon

Opinion: Why Doesn’t Bitcoin (BTC) Seem To Fight Well Against Inflation?

See original on DailyCoin

News Source and Credit

Stocksak Editorial

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