Latin America crypto adoption
Cryptocurrency has been and keeps gaining a notorious and undeniable momentum, especially in the last couple of years, after the historically determining Bitcoin Halving event coincided with the appearance of a worldwide pandemic, resulting in ideal conditions for a sudden surge in both understanding and adoption of cryptocurrencies globally. Currently, as thousands of new users step into the world of digital currencies every day, big corporations publicly announce big crypto purchases and waves of institutional investment become increasingly regular. It is safe to say that not only has cryptocurrency adoption spiked but so has the overall level of trust in crypto.
Latin America is, of course, no exception. In fact, it is one of the regions where cryptocurrency adoption represents a more significant benefit for the population, and as such, it is one of the places where it grows the most. Latin American countries currently face issues such as hyperinflation and imposed sanctions, a general lack of trust in government and central authorities, or poor access to quality or viable banking options. However, these problems can be easily tackled by upcoming crypto and DeFi (decentralized Finance) solutions, and consequently, these solutions have already begun to disrupt the South American banking industry.
One of the examples most obvious examples of Cryptocurrency adoption is El Salvador. As one of the countries with the lowest income per capita in Latin America (and the world), El Salvador became the first country to officially allow the payment of taxes and services with Bitcoin, a measure that aimed for economic development and equality as well as the attraction of foreign investment. In Venezuela, on the other hand, citizens began to hold their funds in Crypto wallets and Exchanges as a way to shield their savings from the country’s unsustainable inflation rates.
Another very important factor to have in consideration when contemplating the advantages and conditions for crypto adoption in Latin American countries is the still very high percentage of unbanked citizens. Brazil and Costa Rica still have around 30% of residents without data held on traditional financial sources and without access to financial services, Bolivia 45%, Peru, Colombia, and Argentina over 50%, Mexico and El Salvador with over 60%. However, with the evolution of alternative and decentralized financial services as those being developed through cryptocurrencies, these high unbanked percentages also represent an opportunity and a big market for Crypto and DeFi projects that aim to tackle financial inequalities and create tools for inclusion worldwide.
Cryptocurrencies are no longer a thing of the future. The world can already feel the effects of mass adoption and the gaps between the more and less privileged get smaller every day. While El Salvador was the first country to accept Bitcoin as legal tender, it may become a success story for other economies and set a standard for the rest of Latin America and the world.
