Latin America is experiencing a financial transformation driven by the rapid adoption of cryptocurrencies and digital assets.
From Bitcoin to stablecoins, cryptocurrencies are gaining ground as a alternative to the traditional banking system, offering citizens in this region new avenues for financial freedom, remittances, investment and savings.
Persistent inflation in Latin America and distrust in conventional financial institutions have created fertile ground for the adoption of these new technologies.
According to recent data from Americas Market Intelligence, cryptocurrency adoption in Latin America is among 15% and 18% of digitalized consumersThis figure, although modest compared to other regions, represents significant growth in recent years.
TRADE WITH STABLECOINSVenezuela y Brazil lead the way, driven by factors such as hyperinflation and limited access to traditional banking services.
The firm’s report highlighted that the rise in cryptocurrency adoption in the region has not gone unnoticed by traditional financial firms. Visa, for example, has partnered with fintechs and digital asset exchanges to facilitate conversions between cryptocurrencies and fiat currencies, recognising the growing demand for these crypto assets and the increasingly important role they are playing in the daily lives of millions of people.
Escaping inflation: Cryptocurrencies as a safe haven
Chronic inflation is a persistent problem in many Latin American economies.
In countries like Argentina and Venezuela, inflation rates have reached alarming levels., eroding citizens’ purchasing power and generating deep distrust in local currencies. In this context, cryptocurrencies, especially Bitcoin and stablecoins such as USDT and USDC, have emerged as an attractive alternative to preserve the value of savings.
Bitcoin, with its limited supply and decentralized nature, is perceived as “digital gold,” an asset inflation resistant that can maintain its value over the long term. Stablecoins, on the other hand, offer the stability of the US dollar combined with the flexibility and speed of digital transactions. Therefore, by converting their pesos or bolivars into bitcoins or stablecoins, Latin Americans can protect their savings from devaluation and make international payments and transfers more efficiently and safely.
But, the adoption of cryptocurrencies in Latin America is not limited to countries with hyperinflation. In more stable economies such as Colombia y Mexico, cryptocurrency adoption is also driven by the search for investment alternatives and the convenience of digital payments.
According to the report, the ability to buy, sell and store cryptocurrencies through easy-to-use mobile apps has democratized access to these assets, allowing even people without sophisticated financial knowledge to participate in the market.
Borderless remittances: Streamlining money transfers globally
Remittances, the money that migrants send to their families in their countries of origin, are a vital source of income for many Latin American economies. However, the Sending remittances through traditional channels, such as money transfer companies, can be expensive and quite slow, with high commissions and very long processing times.
At this point, cryptocurrencies again offer a more efficient and economical alternative for users. By using crypto assets and stablecoins, users can send money to their families almost instantly and with significantly lower fees. Thus, instead of paying a high percentage to a money transfer company, they only have to pay a small transaction fee on the blockchain network to process their transaction.
This use case is especially relevant in countries like Mexico, where millions of people rely on remittances from relatives working in the United States. The firm noted that the adoption of cryptocurrencies for remittances is growing rapidly in Mexico, driven by the availability of mobile applications and exchanges that facilitate conversion between cryptocurrencies and Mexican pesos.
DeFi in LATAM: Opening new investment and performance opportunities
The world of decentralized finance (DeFi) offers a wide range of investment and yield opportunities that are not available in the traditional banking system. For example, through DeFi platforms, users can lend their cryptocurrencies to earn interest, participate in decentralized trading, and access loans without the need for intermediaries.
Thus, in Latin America, where access to traditional financial services is limited for many, DeFi platforms represent An attractive alternative to generate passive income and earn higher returns than those offered by conventional banks. However, it is important to note that DeFi investments also involve risks, mainly due to the volatility of cryptocurrency prices.
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However, despite the existing risks, interest in DeFi is growing rapidly in the region, driven by the search for investment alternatives and the increasing sophistication of cryptocurrency users. Platforms such as Aave, Compound y MakerDAO, now called Sky, are gaining popularity among Latin Americans, offering users new ways to grow their savings and participate in the global digital economy.
Venezuela and Brazil: Leaders of crypto adoption in the region
Venezuela and Brazil stand out as the leading countries in cryptocurrency adoption in Latin America. In Venezuela, hyperinflation and economic crisis have driven the adoption of Bitcoin, stablecoins, and other cryptocurrencies as a way to protect savings and make payments. In Brazil, growing interest in cryptocurrency investment and the availability of innovative financial services have contributed to the rise of crypto adoption.
In both countries, the government has taken an ambivalent stance towards cryptocurrencies, recognising their potential to drive financial innovation but also expressing concern about the risks associated with their use. However, adoption continues to grow at the user level, driven by the need for financial alternatives and increasing awareness of the benefits of cryptocurrencies.
Visa's response: Adapting to the new financial world
More and more traditional financial firms are recognizing the rise of digital assets and adapting to avoid losing market share in the region. Visa, for example, has partnered with fintech companies and digital asset exchanges to help facilitate transfers and purchases of cryptocurrencies into fiat currencies anywhere it is accepted.
In this way, the company can offer its customers access to the world of cryptocurrencies without having to abandon the familiarity they have with their credit or debit card. In addition, Visa is exploring the use of blockchain technology to improve the efficiency and security of its transactions, so by taking a proactive approach to digital assets, it is demonstrating its commitment to remaining relevant in an ever-evolving financial world.
A strong push for financial freedom
Matthew Sigel, head of digital asset research at VanEck, he pointed in X that close to 20% of cryptocurrency holders in Latin America have used cryptocurrencies to make cross-border transfers or purchases, and that this statistic underscores the growing utility of cryptocurrencies in the region and their potential to transform the financial landscape.
Americas Market Intelligence also highlighted that almost half of digital asset users in LATAM have a debit card linked to their digital asset accounts. Of these, more than 10% say they make purchases regularly, demonstrating that there is significant adoption of cryptocurrencies for commercial use in the real world.
BUY BITCOINIn conclusion, the adoption of digital assets in Latin America is a growing phenomenon, driven by the search for financial freedom, the need for alternatives to inflation and the growing availability of innovative financial services.
While there are still regulatory challenges and risks associated with the use of cryptocurrencies, the transformative potential of these assets is undeniable. As blockchain technology continues to evolve and crypto infrastructure improves, we are likely to see even greater adoption in the coming years, reshaping the financial landscape of the region.
