Crypto’s Big Potential in LatAm

$49 billion worth of crypto transactions were registered in LatAam between July 2019 & June 2020 alone…

The region has seen a an impressive & reassuring surge of DeFi within the last couple of years.

But why?

LatAm’s fragmented payments landscape has resulted in low interoperability, leading to high fees for both senders & receivers of payments. What’s more, the region relies heavily on remittances but these are becoming increasingly expensive to send.

DeFi offers an alternative — an instant, trustworthy & cheap method of sending money.

Central banks are interested in re-examining their relationship with crypto, creating an opening for the sector to help make low-cost, faster & more seamless transactions a real possibility.

Maximiliano Hinz, Latam Operations Manager at Binance, a global crypto broker, adds, “This year we’ve seen an incredible increase in adoption in the region, and it’s remarkable to see how confidence in cryptocurrencies as a means of investment has grown.”

LatAm is highly dependent on the US dollar: economies like Costa Rica and El Salvador use dollars interchangeably with local bills. This reliance on USD means crypto adoption in the States is likely to have a major impact on crypto adoption in LatAm.

There are various new fintech players in the market that are working to get involved. From an awareness standpoint, the sponsorship of football clubs across the region by crypto exchanges is helping to bolster public understanding of how to access crypto.

Public adoption & embrace of crypto as an alternative to cash is also gaining popularity in some countries a less volatile alternative to local currency.

The use of crypto as an alternative to cash is being promoted by the government in El Salvador where the adoption of Bitcoin as legal tender is significant.

LATAM is a diverse and varied region, with both developed and emerging economies breaking into the digital payments landscape to varying degrees.

As such, there is a lucrative opening for traditional banks, fintechs and governments to increase adoption of crypto-forward technology.

Perhaps it’s time to jump into LatAm as it becomes more financially independent, more financially attractive, and more financially inclusive.