Argentina leads the region with an estimated $91.1 billion in crypto receipts. That’s only slightly higher than Brazil’s estimated $90.3 billion.
According to Chainalies’ Global Adoption Index, four of the top 20 countries are in Latin America: Brazil (9th), Mexico (13th), Venezuela (14th), and Argentina (15th). The report also revealed that stablecoin-based remittances are gaining momentum in these countries. This includes all of Latin America.
Stablecoins bring hope amid Argentina’s economic crisis, becoming an important tool for the nation’s fight against inflation and peso devaluation
The report also noted that stablecoins offer a path to stability amid Argentina’s prolonged economic turmoil. Argentina has battled decades of inflation and the devaluation of the Argentine Peso (ARS), leaving many citizens looking for alternative ways to protect their savings. They were seeking and securing a more stable economic future.
Unfortunately, Argentina’s economic situation is particularly unstable this year. By late 2023, inflation was around 143%, the value of the ARS had fallen sharply, and four out of ten Argentines were living in poverty.
In December 2023, newly elected president Javier Millay announced a 50% devaluation of ARS, which he described as “shock therapy.” He also revealed that the government plans to cut energy and transport subsidies. To protect themselves from this economic crisis, some Argentines are turning to the black market to obtain foreign currency, most commonly US dollars (USD). These “blue dollars” are U.S. dollars traded at a parallel, unofficial exchange rate and are often purchased through secret exchange offices called “cuevas” located throughout the country. Some are considering stablecoins pegged to the US dollar.
Argentina’s Advantage in Stablecoins: A Strategic Response to Inflation and Economic Instability
Argentina’s stablecoin market is one of the leaders in the Latin American region. Argentina’s share of stablecoin trading volume is 61.8%. According to the report, this is slightly higher than Brazil’s share (59.8%) and significantly higher than the global average (44.7%).
Separately, the value of retail-sized stablecoins received in Argentina (i.e. transactions below $10,000) is increasing at a faster rate than the value received in other asset types. The report suggests that Argentines are turning to stablecoins as a way to cushion the effects of inflation and currency devaluation.
Their interest in stablecoins highlights the role of cryptocurrencies in volatile markets. It also shows how citizens can take better control of their economic future. This primarily happens through the adoption of cryptocurrencies, regardless of official monetary policy.
Argentina’s adoption of a crypto-based stablecoin proves the potential of blockchain technology to foster economic stability and prosperity even in difficult economic environments.
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Gairika holds a position in BTC. This article is provided for informational purposes only and should not be construed as financial advice. The Shib Magazine and The Shib Daily are the official media and publications of the Shiba Inu Cryptocurrency Project. Readers are encouraged to conduct their own research and consult a qualified financial advisor before making any investment decisions.
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