The ongoing global pandemic has not slowed the number of cryptocurrency transactions in Latin American countries. Blockchain analysis shows that the total cryptocurrency value transferred from the region has increased since March. The largest portion of it is going to East Asia. According to the blockchain analytics firm Chainalysis, which recently published research showing how unbanked businesses and individuals in Latin America are using cryptocurrency as a means of exchange, a store of value, and speculative investment.
An ineffective banking system drove crypto adoption.
The blockchain analytical firm found that the region’s ineffective banking systems are a major driver in cryptocurrency adoption in Latin American countries. Historically, most remittances in fiat currency to Latin America come from the US, mainly from migrant workers sending funds back to families. Yet, with cryptocurrency transactions, Latin America has strong links to East Asia, with transactions between the two continents worth more than $1 billion, even though there are fewer overall transactions. The blockchain analytical firm found that many of the payments are from Latin American businesses buying goods from Asian exporters to re-sell at home.
The amount of P2P trading volume in many Latin American countries has increased.
Latin Americans are also finding cryptocurrencies to be a better store of value than their sometimes-unstable national fiat currencies. The report shows that the amount of crypto P2P trading volume in many Latin American countries has risen as the native currency depreciates. The continent had the third-highest inflation rate of any region in 2019 (7.1%), just behind the Middle East (8.5%) and Sub-Saharan Africa (8.4%), with the majority of this inflation coming from the hyperinflation of the Venezuelan bolívar and the Argentine peso. African countries have also reported a significant increase in the p2p crypto trading over the last year, Sahil Kohli reported.