This year has not been the best year for the economic status in Latin America. However, cryptocurrency growth in the continent continues to show great potential. According to a survey conducted by Statista, people in third world countries, are exploiting the benefits of cryptocurrencies more than the folks in stable and thriving nations.
According to the data collected, Turkey has the highest number of people using cryptocurrency at 20%, followed by Brazil at 18%, Colombia at 18%, and Argentina at 16%. Other countries in South America, such as Chile and Mexico, follow with high numbers. This is a clear indicator that Latin America is above the world’s average in terms of crypto use.
Banking and Inflation in the Latin America
In third world countries, banking systems in the traditional sense, as well as the modern financial institutions, are hard to come by. Statistics show that 45% of Latin Americans do not have a bank account. This means about 306 million people are left out of the economy, which limits their growth and social advancement. The last two decades have seen a rise in the popularity of the internet in Latin America, which has brought about an increase in the interest of alternative ways to transfer and save money.
In Latin America and other third world countries, the economies are more often than not characterized by high inflation levels. Cryptocurrencies are bringing the users alternative independence from their country’s misgivings.
Crypto is the first inline of the online ways that give folks in these regions a chance for economic inclusion. Bitcoin and other cryptocurrencies offer cheap transaction fees through the internet without censorship. A source code controls Bitcoin emissions, which dispels the need for inflation.
The volatility in Latin America stands to be one of the deterring factors that limit its economic growth. Cryptocurrencies are, therefore, a haven for people in these countries. Insufficient banking and excessive inflation in Latin America places cryptocurrencies to be the ideal alternative to fiat currency.
Bitcoin acting as a replacement for the local fiat currency would result in more financial stability for the more impoverished citizens. For example, people working abroad would send money home without service charges and inflation affecting them.
Crypto Projects Targeting Latin America
Various crypto projects have seen potential Latin America holds due to issues such as underdeveloped financial infrastructure, corruption, inflation as well as the troubled economy. For that, various crypto projects are setting shop in Latin America.
Dash is one of the crypto projects that has announced its expansion in growth to Latin America. Dash leaders held a video conference to discuss Dash’s growth and cryptocurrency adoption. Giorgio Marinetti of Dash Help stated that improving communication will help with cryptocurrency adoption. They explained that they would achieve this by writing documents such as marketing materials, guidelines, and technical papers in Latin languages, Spanish, and Portuguese.
Roel Castano of Dash Mexico talked about remittances where he said that the transaction speeds and costs are excellent, but the remittance was not accessible everywhere. Despite the corruption and economic issues in Brazil, their economy is somewhat decent. Thus, Dash Brazil plans to spread awareness on how to effectively spend and save money. Mexico needs help in sending and receiving remittances, while other countries like Venezuela are dealing with hyperinflation. Dash, along with other exchanges such as Bitnovo, has found a niche in the market in Mexico.
Another crypto project that has a huge set up in Latin America is Bitso. It is based in Mexico, where it has had a lot of growth in terms of trading volumes and number of users. Bitso is the ultimate choice for Mexicans when they want to acquire crypto. It is the largest crypto platform in Mexico with a diverse portfolio, where Mexicans can deposit and trade their Mexican Pesos for crypto. Altcoins such as the BAT and TUSD are also available at Bitso.
In Columbia, there is Daexs, a crypto exchange platform. The platform, in association with Colombia Fintech and Blockchain Global, offers its users in Columbia and other Latin American countries easy, quick, and secure access to cryptocurrency.
Bitex in Argentina is a crypto platform that allows people in Argentina to access significant cryptos such as Bitcoin and ETH. Bitex is best known for endorsing Alto Viaje, a public transport company that made cryptocurrencies a viable payment option.
Cryptocurrency Regulations in Latin America
Cryptocurrency regulations in Latin America are quite diverse. Some countries have harsh rules in place, while others like the concept of cryptocurrencies. Bolivia has banned cryptocurrencies as well as exchanges, while
Eduardo prohibited the circulation of all cryptocurrencies apart from SDE token, which is government-issued. On the other hand, in Mexico, Argentina, Chile, Venezuela, and Brazil, cryptocurrencies are accepted as payment.
Factors such as the extensive political tension, hyperinflation, and shortages of vital commodities have all led to discontent among the people of Venezuela. More, besides the weak economy, political instability, and corruption, Venezuela citizens are also faced by sanctions imposed on them by the U.S and other countries. These sanctions and blockades are fueling economic warfare in Venezuela.
The Venezuelan president, Nicholas Maduro, in a bid to dodge the sanctions imposed on Venezuela announced to launch the Petro cryptocurrency backed by Venezuelan oil reserves. Maduro claimed that Petro would allow Venezuela to access new forms of international funding. This was, however, met with hostility from the opposition party, claiming that it was a form of corruption and fraud disguised as a financial solution.
In early 2018, Petro presale was launched, availing 82.4 million Petro’s to exchange with selected fiat currencies and digital currencies. Three days after the launch, Venezuelan media stated that the project had made $ 1 billion. The government started initiatives to promote Petro’s adoption. The president announced the launch of a crypto bank that would be funded by Petro to support project proposals from the youth. The habitat and housing minister announced the construction of houses for the homeless using Petro.
In November 2018, the Venezuelan National Assembly approved a bill with new cryptocurrency regulation. The bill would legitimize Petro as a unit of commercial exchange in Venezuela. The National Assembly also amended the anti-money laundering laws to pave the way for Petro. Andres Mendez described these changes as ways to fight the sanctions and blockades maintained by the U.S government.
Maduro has urged 10 South American nations to adopt Petro, stating that it will be an integration currency among the countries. The Venezuelan government also put out a call for Petro miners. Maduro ordered leading Venezuelan bank, Banco de Venezuela, to have Petro counters in all their branches and accept PTR.
Prospects of the crypto market are looking good in the coming years. Given the technology behind cryptocurrencies, it is safe to say it has a market niche in Latin American countries. Crypto can help with the banking situation remittances, among other issues that Latin American countries are facing.