According to a recent survey, the three main factors influencing the adoption of cryptocurrencies in Latin America are remittance payments, fiat worries, and profit-seeking, as reported by Cointelegraph.
According to Chainalysis research released on October 20th, the value of cryptocurrencies acquired by individuals in the seventh-largest cryptocurrency market in the world increased by 40% between July 2021 and June 2022, hitting $562 billion.
Remittances had a role in the increase; it is predicted that the region’s total remittance industry will reach $150 billion by 2022. The uptake of cryptocurrency-based services was “uneven, yet quick,” according to Chainalysis.
The company cited one Mexican exchange that was part of the “biggest crypto remittance corridor,” processing over $1 billion in remittances between Mexico and the United States in only the one year ending in June 2022.
It represented a 400% growth year over year and 4% of the country’s remittance market.
However, the analytics company claims that the region’s extremely high inflation rates have also had a significant impact on the adoption of cryptocurrencies, particularly U.S. dollar-pegged stablecoins. Stablecoins, which are digital currencies intended to be anchored to the value of fiat money like the US dollar, are popular in the region’s most severely affected by inflation, according to the company.
This has caused common consumers to take and retain stablecoins in order to make their routine purchases in an effort to shield themselves from their depreciating national currencies.
In addition, Chainalysis highlighted that people from Venezuela, Argentina, and Brazil were most likely to use stablecoins for modest retail transactions (under $1,000). The report quoted a June Mastercard poll that revealed almost a third of consumers now use stablecoins to make routine purchases.
(With insights from Cointelegraph)
Also Read: FDIC’s Martin Gruenberg on stablecoins’ usage in payment mechanisms
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