Stablecoins gain ground in Latin America as inflation surges
Growing economic uncertainty drives increasing use of digital currencies for day-to-day transactions
In a decades’ long economic crisis, Argentina saw its year-over-year inflation rate soar to 236.7% through August 2024—meaning the Argentine peso was losing an incredible amount of purchasing power.
Other Latin American countries such as Venezuela also saw sharp inflation hikes, with the country observing a 99.98% increase compared to the previous year.
With these shocking figures, the latest findings of blockchain data platform Chainalysis come as no surprise, as people turn to other alternatives to protect their money. The data firm “[looked] at crypto adoption in Latin America”, finding Brazil, Venezuela, Mexico, Argentina, and Colombia as top adopters.
In our next 2024 Geography of Crypto Report preview chapter, we look at crypto adoption in Latin America. Read to learn more about crypto markets in Brazil, Argentina, Venezuela & the Caribbean. Featuring insights from @circle @BTGPactual @AaronWStanley: https://t.co/sPVXseFsuf pic.twitter.com/g0w9M7cvqy
— Chainalysis (@chainalysis) October 9, 2024
Going further, Chainalysis’ Global Adoption Index that monitors worldwide crypto use has highlighted Brazil, Mexico, Venezuela, and Argentina as part of the top 20 contenders. These countries’ remarkable emergence can be explained by the increase of stablecoin-based remittances, as more people from these areas turn to these assets as lifelines.
As for Argentina, the country’s unending inflation saga has forced citizens to explore alternatives to protect their money. In what seems like a financial survival scenario, some Argentinians have sneaked into the black market to buy US dollars and other foreign currencies. Others have also opted for stablecoins pegged to USD as a safer alternative.
In the case of Venezuela, the decline of its currency’s value has prompted more people to adopt crypto.
According to a Forbes report, stablecoins generally serve as a store of value, medium of exchange, and asset for trading. Its growing utility in Latin American countries like Argentina show that the crypto markets in the region are poised for growth.
However, the growing adoption of stablecoins goes beyond the Latin American landscape. As stablecoins also serve as a convenient way to enter the crypto space, more and more emerging markets all over the world are adopting them, making the future extremely bright for this fintech revolution.
