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Latin America is experiencing a major surge in cryptocurrency adoption amid rising inflation and persistent currency devaluation. According to a recent Chainalysis report, the region received $415 billion in digital assets between July 2023 and June 2024, accounting for 9.1% of global crypto value during that period.
Notably, Argentina has emerged as the frontrunner, receiving $91.1 billion in crypto over the last year.
Stablecoins have become a crucial financial tool in Argentina, where inflation soared to a staggering 209% in September. Over 61.8% of crypto transactions in the country involve stablecoins, allowing citizens to protect their wealth from the relentless devaluation of the Argentine peso.
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Daniel Vazquez, a university professor, remarked on the growing economic divide: “Prices keep going up, and the only thing that isn’t going up is salaries.” For many Argentinians, stablecoins offer a lifeline in the midst of financial instability.
Brazil’s Institutional Growth
Brazil has also seen stablecoins dominate its crypto landscape, with 70% of flows from local to global exchanges being stablecoin transactions. This trend is not isolated to Latin America; countries such as Nigeria, Turkey, and Indonesia are also witnessing increased stablecoin usage, as noted by Castle Island Ventures in their September report.
In Brazil, institutional investors are playing a major role in the country’s crypto adoption. Between Q4 2023 and Q1 2024, there was a 48.4% increase in large institutional crypto transactions. The introduction of Bitcoin and Ethereum exchange-traded funds (ETFs) has attracted major financial players, further accelerating crypto adoption in the country.
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Venezuela Records Massive Crypto Adoption
Venezuela has seen the fastest growth in crypto adoption in Latin America, with a year-over-year increase of 110%.
As the nation continues to grapple with economic instability and a devalued bolívar, many Venezuelans are turning to cryptocurrencies as a safe haven to protect their wealth. The political uncertainty under President Nicolás Maduro has only exacerbated the situation, leading citizens to seek refuge in decentralized finance (DeFi) platforms.
The Chainalysis report suggests that this trend could gain even more momentum if the Maduro regime begins to explicitly support cryptocurrency innovation.
Moreover, a March report by Mastercard noted the major growth of remittances in Latin America, outpacing the global average. This could also be a factor contributing to crypto adoption in the region, as the payment giant anticipates a transition from cash to digital options.
