Cryptocurrencies are helping Latin American and Caribbean countries overcome their crises current, gaining greater trust and popularity among citizens.
Cryptocurrencies are increasingly common in Latin American and Caribbean countries, from those where their politicians promote them as a flag of exchange, to those where it is remembered that they still lack legality.
In August, Chainalysis certified with a study the current importance of cryptocurrencies in this region of the world. The blockchain analysis firm noted that cryptoassets have become the driving force of emerging economies. A complete success if we look at the rise and adoption that cryptocurrencies are having in countries such as El Salvador, Venezuela, Argentina, Brazil, Colombia, Mexico and Cuba.
The volume of cryptocurrency operations that moves in the region is still one of the smallest, compared to other regions such as Europe, which is currently the largest crypto economy in the world. However, citizens' interest in this class of digital assets is leading businesses to adopt cryptocurrencies as a means of payment, universities to list new careers focused on these innovative technologies, and politicians to consider new regulations that allow the crypto market to develop in a sustainable and healthy way.
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Adoption of cryptocurrencies in Latin America
The use and knowledge about cryptocurrencies and digital assets has been considerably promoted in Latin America and the Caribbean, and here are some of the main reasons for this growing adoption.
Bitcoin, hedge against inflation
Much of the cryptocurrency boom in Latin America is being caused by Bitcoin, the world's first successful cryptocurrency. Bitcoin, which was launched on the market in 2009, has appreciated in a way never ever imagined in the last 12 years. To date, the industry's leading cryptocurrency trades near $57.500 per unit; This is more than 80.000% growth since it surpassed $100 for the first time. And it is precisely this long-term revaluation potential that has made Bitcoin the preferred hedging asset for many.
Source: CoinGecko
We must not forget that many nations in Latin America and the Caribbean face harsh economic crises, especially Venezuela, Argentina and Cuba, where the economic devaluation and instability of their fiat currencies decimate the income and savings of citizens every day.
Sebastián Villanueva of SatoshiTango told Chainalysis that countries like Venezuela and Argentina are “printing money like crazy,” causing their fiat currencies to lose value. This is what is driving the adoption of cryptocurrencies, he said.
Sending of remittances
Also, due to their characteristics and properties, cryptocurrencies have become the perfect means to receive value in the region. According to Chainalysis, remittances through cryptocurrencies in Latin America have grown exponentially in the last two years, thanks to the fact that these digital assets allow direct cross-border transactions to be made to anyone anywhere at a very low cost. Waiting times to receive money through cryptocurrency transactions are also quite short, compared to traditional means.
Payment method
Likewise, it is increasingly common for businesses and businesses in Latin America and the Caribbean to accept cryptocurrencies as a means of payment. The main reason for this adoption is that the value of cryptoassets is not affected by the current inflation that exists in the region, allowing it to be a type of “hard” currency with which merchants and citizens can preserve their value. . Also, by facilitating digital payments for any amount of money, no matter how small or large, cryptocurrencies help solve the crisis and cash shortage, especially in countries like Venezuela.
Recently, the Simón Bolívar International Airport in Maiquetía (Venezuela) reported that it will begin to accept cryptocurrencies as an alternative payment for its air tickets. Also, the supermarket chains Bio Mercados, Excelsior Gama and Central Madeirense and other establishments in the country, such as Traki, Farmatodo, Pizza Hut, Church's Chicken and Cines Unidos, already accept payments in bitcoins and other crypto assets. Recent data from the digital medium The Journal indicate that in Venezuela there are close to 20.000 establishments and businesses that accept cryptocurrencies. Also, the Latin country is launching its first themed cafe specialized in Bitcoin.
In other countries like Cuba, the great boom in cryptocurrencies made the country declare payments and remittances with these digital assets legal. While in El Salvador, the first country in the world to give legal tender to Bitcoin approximately a month ago, there are already more than 180 businesses accepting payments with the cryptocurrency.
Purchase of real estate
Another use case for cryptocurrencies that is becoming quite common in Latin America is the purchase of real estate. In Venezuela and Colombia, property sales have already been held using crypto assets as a means of payment, but always in common agreement with the seller.
Camilo Suarez, president of Asoblockchain and founder and CEO of the Suarez Venegas firm in Colombia, said in an interview that although cryptocurrencies do not have legal status in the country, as is the case in El Salvador, they are equally viable when buying real estate. in a process known as an exchange. The expert explained that property purchases with cryptocurrencies in Colombia require a document detailing the value of the property and its equivalent in cryptocurrencies, as well as the shipping and receiving addresses of the cryptoassets and a payment receipt that includes the hash of the operation.
Mining and renewable energy
Cryptocurrency mining, the backbone of the crypto space, is also seeing a big boom in Latin America. Companies like Bitfarms are beginning to expand further in this region, while some governments are focused on attracting foreign investment and capital to their territories, offering advantages to miners, such as access to cheap energy from renewable sources.
In El Salvador, which has made great progress in its initiative to mine bitcoins with renewable energy, it is building a mining center powered by the heat of volcanoes. In Paraguay, the country is studying the approval of a bill that will turn the nation into a global benchmark for crypto mining, in a safe and environmentally friendly manner; although the country has no plans to adopt Bitcoin legally.
Educational growth
The growth of cryptocurrency users and companies that offer services with these digital assets in Latin America is driving universities in the region to teach new courses and professional careers focused on these innovative technologies.
In countries like Colombia, Venezuela, Chile, Argentina and others, it is already a reality to be able to take specialized courses and diplomas on Blockchain and Cryptocurrencies and even study a professional career within this technological sector. Universities of recognition and prestige such as the Pontifical Catholic University of Chile, the Digital University Institution in Colombia, the University of Sao Paulo in Brazil and the University of Palermo in Argentina are some of the many that are already training professionals in the revolution of the cryptocurrencies and new technologies.
The study programs of these universities are focused on training professionals and experts trained in cryptocurrencies to explore all the technological advances that accompany this innovation and meet the demand for professionals in the market; so they range from the development and implementation of blockchain platforms, to the development of smart contracts, decentralized applications (DApps), creation of Wallets or digital wallets, trading platforms and even the popular non-fungible tokens or NFT.
A high level of education and training on Bitcoin, Blockchain and the crypto industry in general will help the countries of Latin America and the Caribbean to promote the development of these new technologies, as well as to boost their economic growth and development and that of the industries. who make use of them.
America's role in crypto
Although cryptocurrencies are already a trend in Latin America, many of their governments seem to be still not convinced of the potential and benefits that this industry can offer. In the case of Argentina, the country's government is beginning to impose strict new requirements to limit entry into this emerging market.
On the other hand, Cuba clarified that although payments and remittances with crypto assets are legal, the use of cryptocurrencies is limited only to monetary-mercantile and exchange operations. Other nations, such as Brazil, Panama, Colombia and even Mexico, are considering the enormous potential that digital assets encompass and are making their regulations more flexible to adapt to this technological innovation.
In summary, although cryptocurrencies have gained greater confidence and payments and remittances with cryptoassets have become popular in recent years, it remains to be seen what decisions regulators and legislators will make in this region to enhance the crypto industry, providing security and stability. for mass adoption.
Continue reading: Bitcoin and cryptocurrencies are now legal for payments and remittances in Cuba
