Latin Americans have embraced cryptocurrency as a store of value while their fiat currencies depreciate, a new report shows. Bitcoin adoption in the region is further driven by the lack of banking access and remittance needs.
Latin American Bitcoin Adoption
Blockchain data analytics firm Chainalysis released a new study of cryptocurrency usage in Latin American countries based on on-chain data and interviews with experts in the region last week. The study is part of the firm’s Geography of Cryptocurrency Report, due to be released this month. Cryptocurrency adoption in Latin America is driven by factors such as a lack of banking access, remittance needs, and the devaluation of local fiat currencies.
Sebastian Villanueva, who manages the Chile operations of crypto exchange Satoshitango, explained that the lack of banking access for individuals and businesses is a major drive for cryptocurrency adoption in Latin America. “Lots of people here have uneven income because they do gig work for Uber or places like that, which makes it hard for them to get a bank account,” he said, asserting:
Without easy banking access, many young people in Latin America turn to cryptocurrency as a means of storing value.
Many Latin Americans use stablecoins like DAI and USDC to lock in their savings, Villanueva noted. Chainalysis explained that a significant share of the stablecoin transfer volume in the region is from traders using fiat to buy bitcoin or stablecoins, like tether, from local exchanges or P2P exchanges, and then use those funds to trade on larger exchanges like Binance that provides more trading pairs and greater liquidity. “This is a common pattern not just in Latin America, but in other developing regions as well,” the firm noted.
“Currency instability is another factor driving cryptocurrency adoption in Latin America,” Chainalysis claims, noting that “the amount of P2P trading volume in many Latin American countries rises as native currency depreciates.”…