Inflation makes crypto a safe haven in the Latin American economy. Stablecoins and DeFi will rise as currencies in the region depreciate.
Inflation and ongoing currency devaluation in Latin America are driving the rise in crypto adoption.
The region received nearly $415 billion in digital assets, accounting for 9.1% of the global crypto value received between July 2023 and June 2024.
It is placed just above East Asia, according to recent Chinalysis report.
Argentina
Argentina topped the list with $91.1 billion in crypto received in the past year.
Stablecoins account for over 61.8% of Argentina's crypto transactions.
For many Argentinians, stablecoins provide protection against triple-digit inflation, which has reached 209% in September.
“Prices keep going up and the only thing that doesn't go up are salaries,” said university professor Daniel Vazquez, “and the gap is huge.”
Brazil
In Brazil, stablecoins also dominate, accounting for 70% of flows from local exchanges to global exchanges.
Join the community to get our latest articles and updates
This trend extends beyond Latin America.
As Castle Island Ventures noted in its September report, stablecoin use is also growing in countries such as Nigeria, Turkey and Indonesia, where “the potential welfare benefits of effective access to alternative hard currencies for billions of users in developing markets must be addressed. The merits of stablecoins are debated.”
Institutional investors are helping to fuel the country's growth with a 48.4% increase in institutional-sized crypto transactions between Q4 2023 and Q1 2024.
Regulatory progress and the introduction of Bitcoin and Ethereum ETFs have helped attract more major financial players.
Venezuela
The report found that Venezuela's crypto adoption “exceeds that of any other country in the region,” with a 110% year-over-year increase.
For many citizens, crypto offers a way to escape financial volatility and protect their wealth from the devaluation of the bolivar due to ongoing political uncertainty. The Maduro regime.
As traditional financial systems become less reliable, DeFi platforms are also gaining more traction in the country.
Chinalysis notes that this trend will “accelerate if the Maduro regime clearly supports crypto innovation.”
Related TopicsSTABLECOIN
