- Inflation drives crypto as a safe haven in Latin America’s economy.
- Stablecoins and DeFi rise as currencies devalue in the region.
Inflation and ongoing currency devaluation in Latin America are causing a surge in crypto adoption.
The region, which accounted for 9.1% of global crypto value received between July 2023 and June 2024, received nearly $415 billion in digital assets.
This places it slightly above Eastern Asia, according to a recent Chainalysis report.
Argentina
Argentina leads the region with $91.1 billion in crypto received over the past year.
Stablecoins account for over 61.8% of Argentina’s crypto transactions.
For many Argentinians, stablecoins provide a hedge against triple-digit inflation, which reached 209% in September.
“Prices keep going up, and the only thing that isn’t going up is salaries,” said university professor Daniel Vazquez, “The gap is very, very big.”
Brazil
In Brazil, stablecoins also dominate, comprising 70% of flows from local exchanges to global ones.
This trend extends beyond Latin America.
As Castle Island Ventures noted in its September report, stablecoin usage is also growing in countries like Nigeria, Turkey, and Indonesia, where “the potential welfare benefits of efficient access to alternative hard currencies for billions of users in emerging markets must have a place in the discussion of the merits of stablecoins.”
Institutional investors are helping to fuel the country’s growth with a 48.4% increase in institutional-sized crypto transactions between Q4 2023 and Q1 2024.
Regulatory progress and the introduction of Bitcoin and Ethereum ETFs have helped attract more major financial players.
Venezuela
The report found that Venezuela’s crypto adoption has “far exceeded any other country in the region,” with a year-over-year increase of 110%.
For many citizens, crypto offers a means to escape economic instability and protect their wealth from the devaluation of the bolívar due to ongoing political uncertainties under the Maduro regime.
With traditional financial systems becoming less reliable, DeFi platforms are also gaining more traction within the country.
Chainalysis posits that this trend could “accelerate if the Maduro regime explicitly supports crypto innovation.”
