Why crypto adoption in Latam is so high
I have previously explained why I’m bullish on crypto, and outlined many reasons, and some of those biggest value adds explain pretty well why Latam is welcoming crypto with open arms.
Let’s take a look at some data to gain a better perspective.
As you can see, within the Top 10 countries, 5 are from Latin America, including Brazil, Colombia, Argentina, Mexico and Chile. Now, Latam is not precisely known for rapid innovation, so why is this the case with crypto?
If I have to summarize in one word why crypto adoption has scaled up so fastly in Latam, it’s definitely “access”. It enables access to another option, access to opportunities, access to an alternative to what the current system offers.
Let me give break down a bit more what kind of access crypto is enabling in Latin America.
Access to store of value
Crypto presents an alternative to the highly inflationary, unstabe and volatile local fiat currencies, and in some cases, like Venezuela and Argentina, the local fiat currencies can be even more volatile than the cryptocurrency itself.
In my case, growing up in Argentina, political and economical instability is very normal. We have learned to live with constant changes of rules, cyclical fluctuations, and we have learned to adapt and survive. The lack of opportunity and access to alternatives is a big issue, and as a consequence, it’s very hard not to feel that our world is getting smaller and smaller…
We have very limited access to foreign currency: you can’t buy any foreign currency, unless previously approved by the government, and within the tiny limit allowed per person, per month. The news report 2 types of exchange rates: one, the official one that the government reports, and the other one, the actual one that citizens can get a hold on in the black market (we actually call it “dollar blue”, I never understood why we don’t call it “black” instead).
So see, when your country has an inflation rate of almost 50% on a yearly basis, you pretty much have nothing else to lose. And this is the main reason why stablecoins also have so much success in the Latam region.
Access to banking services
According to the World Bank Organization, around half of the Latin American population doesn’t have access to banking services, and even lesser people have credit cards. Therefore, crypto provides and opportunity to leapfrog from the inefficient traditional financial services, to a digital, faster, and cheaper option.
Access to remittances
This is probably similar to the rest of the world, where transferring money internationally is always painful due to the slow transactions that can take days to complete, as well as the high fees involved in doing so.
Therefore, there are some really great platforms that allow users in different countries to send each other money in very easy steps, such as LaPlataforma from Chile. You don’t even need to have a bank account to do so.
Obviously, there are also some extreme cases where people use blockchain platforms to transfer money because traditional methods are not secure, or under surveillance, such as Venezuela’s case.
Lastly, I want to mention that crypto represents access to a better future.
My country and my region is beautiful. We are happy, passionate and joyful, and I’m very proud of it.
However, the lack of access to better opportunities is also very true. The political and economic fluctuations really get in the way of stable and consistent growth. It seems like we do one step ahead, and 3 steps back.
I’m not saying that crypto can solve for this completely, and obviously there are many more complicated factors in the history and development of Latin America, collectively as a region, as well as individually per country.
However, the way I see it is that previously, I could not envision a different system that people could lean on to break through the vicious and corrupted circle, but now I can see that there is an alternative that is bringing light and immediate benefit to people’s struggles.
Your world expands as your possibilities expand, so no wonder how welcoming Latin America has been towards cryptocurrencies.
As a consequence of this hype, there is a growing blockchain startup ecosystem in the region, revolutionizing not only the financial system, but also contacts, fundraising, etc. Argentina, my home, is one of these hubs.