- Reports from Chainanalysis show that Venezuela and Argentina lead in crypto adoption amidst economic turmoil.
- Stablecoins like USDT act as lifeline for citizens amid Argentinian peso devaluation.
- Cryptocurrency empowers democracy activists, overcoming censorship and civic space closure.
In recent years, Latin America has emerged as a significant player in the global cryptocurrency landscape, currently ranking seventh in terms of crypto economy size among the regions under study. While lagging behind some regions, Latin America has shown remarkable stability in its position, trailing only Sub-Saharan Africa in terms of crypto economy size.
Latin America’s crypto market has a strong preference for centralized exchanges, setting it apart from other regions. Despite its smaller crypto economy compared to others, the region exhibits robust grassroots adoption, notably in countries like Brazil, Argentina, and Mexico. Brazil stands out with its well-established institutional crypto market and a growing trend in decentralized finance (DeFi) adoption. Although large institutional transactions in Brazil have declined, there’s an encouraging resilience among high-value crypto traders and retail users, indicating a promising outlook for the market.
Argentina, on the other hand, is grappling with severe economic challenges, including a staggering 51.6% devaluation of its currency, the Argentinian peso, in the year leading up to July 2023. Despite these hurdles, cryptocurrency adoption has surged in Argentina, with stablecoins like USDT serving as a lifeline for citizens looking to preserve their savings amidst rampant inflation. Alfonso Martel Seward, Head of Compliance and AML at Argentina-based cryptocurrency exchange Lemon Cash, emphasized the role of crypto in overcoming the devaluation crisis. He noted,
Crypto is a valuable option for saving… lots of people here will now get their paycheck and immediately put it into USDT or USDC.
In Venezuela, the situation is compounded by an authoritarian regime and economic turmoil, leading citizens to turn to cryptocurrency for financial stability. Venezuelan opposition leader Leopoldo López highlighted the significant impact of cryptocurrency on preserving savings, enabling remittances, and even resisting oppressive governments. Moreover, cryptocurrency played a pivotal role during the COVID-19 crisis in 2020, facilitating direct aid to healthcare professionals when traditional financial channels were blocked due to government interference.
The cases of Argentina and Venezuela underscore the transformative power of cryptocurrency in regions facing economic crises and political challenges. These stories serve as a powerful testament to the technology’s potential to foster financial freedom and improve lives in the face of adversity. López emphasized the significance of cryptocurrency for democracy activists, stating,
Crypto has provided an alternative to democracy activists, NGOs, and freedom fighters to overcome censorship and the closing of the civic space.
Talking about utility adoption by latin America, recently, Despegar, a leading online travel agency in Latin America, partnered with Binance and Inswitch to enable cryptocurrency payments for its clients in Argentina. This partnership allows Despegar’s users to pay for any of its products or services using cryptocurrency, including the popular meme coin Shiba Inu (SHIB). As a result, Despegar became the first online travel agency in Latin America to accept cryptocurrency as a form of payment, making it easier and more convenient for its clients to book and pay for their travel needs.
