Inflation has led to the rise of cryptocurrencies as a safe haven for Latin American economies. As the region’s currencies fall in value, stablecoins and DeFi are rising.
Inflation and currency devaluation continue in Latin America, leading to a surge in the adoption of cryptocurrencies.
The region accounted for 9.1% of the global cryptocurrency value received from July 2023 to June 2024, receiving nearly $415 billion in digital assets.
This puts it slightly ahead of East Asia, according to a recent Chainalysis report.
Argentina
Argentina leads the region with $91.1 billion in total cryptocurrency received in the past year.
Stablecoins account for over 61.8% of cryptocurrency transactions in Argentina.
For many Argentines, stablecoins are a hedge against triple-digit inflation, which reached 209% in September.
“Prices continue to rise, but the only thing that hasn’t gone up is wages,” said university professor Daniel Vasquez. “The difference is huge.”
Brazil
Stablecoins are also mainstream in Brazil, accounting for 70% of flows from domestic exchanges to global exchanges.
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This trend extends beyond Latin America.
As Castle Island Ventures noted in a September report, stablecoin usage is also increasing in countries such as Nigeria, Turkey, and Indonesia, with “billions of users in emerging markets effectively turning to alternative hard currencies.” The potential benefits of having access to “stablecoins” should be leveraged in this country as well.” Discussion of the benefits of stablecoins. ”
Institutional investors are helping drive the country’s growth, with institutional-scale cryptocurrency trading increasing by 48.4% between Q4 2023 and Q1 2024.
Regulatory developments and the introduction of Bitcoin and Ethereum ETFs are attracting more large financial institutions.
Venezuela
The report revealed that Venezuela’s cryptocurrency adoption “far outpaces any other country in the region,” increasing by 110% year-on-year.
For many citizens, cryptocurrencies offer a way to escape economic instability and protect their wealth from the devaluation of the bolivar due to continued political uncertainty under Maduro.
As the traditional financial system becomes less reliable, DeFi platforms are gaining momentum in Japan.
Chainalysis speculates that “this trend could accelerate if the Maduro government explicitly supports crypto innovation.”
