The current crypto ecosystem in Latin America

Cryptocurrencies have gained ground in the region thanks to their many uses, including combating inflation. 

Since the appearance of Bitcoin in 2009, cryptocurrencies have continued to evolve and blockchain technology has become an integral part of the new internet revolution. BTC was valued at almost $69,000 in November 2021, reaching an all-time high. A difficult period ensued for cryptocurrencies, which dropped in value, but their use continued to grow substantially around the world. The crypto ecosystem is fully established in several Latin American nations, including El Salvador, where crypto is considered legal tender.

Cryptocurrencies have become popular in Latin America in recent years because they have many different uses, and a number of advantages compared to conventional currencies. For example, crypto can be transferred from one country to another immediately, with practically no commission. On the other hand, when this procedure is carried out by an agency using physical money, it can take several hours or days, with a high commission that can total up to 10% of the full amount sent.

A cryptocurrency is a digital asset whose cryptographic encryption determines its owner, and ensures secure transactions through blockchain technology. To hold crypto, you need to set up a virtual wallet in any number of exchanges around the world.

Cryptocurrencies have become a trend because of the inevitable migration to digital. This can be seen every day with devices such as digital tablets, and online or contactless payments. Crypto is trending upwards in Latin America for this reason, and also because it is seen as a good option for avoiding inflation in several countries in the region. 

Sherlock Communications’ Blockchain report 2023 contains valuable information on how individual countries are dealing with crypto’s challenges and opportunities – whether it is taxed, what regulation is in place or under consideration, the creation of central bank digital currencies (CBDCs), the recent tokenization of assets, and NFTs that make up their own market.

As in all industries, the perceptions of crypto stakeholders, users and potential customers is very important. That is why cryptocurrencies and Blockchain PR go hand in hand. Brand awareness can be generated through a press release, but other strategies are vital to attract attention.

Building media relations is a vital element of PR in this fast-growing industry. Latin America’s adoption of cryptocurrencies is making more and more newspapers, radio and television channels turn their gaze to the Blockchain ecosystem, and the media are eager for accurate information and spokespersons, who can act as industry specialists.

Latin America is a major global market, and moved 562 billion dollars in cryptocurrencies between July 2021 and June 2022 according to Chainalyisis – a growth of 40% compared to the same period a year earlier. 

Latin American countries have some of the highest crypto adoption in the world – Brazil, Argentina, Colombia and Ecuador in particular. The crypto ecosystem in Latin America has been growing, and is migrating towards stablecoins as a way of safeguarding money using a stable currency pegged to the US dollar. In nations with governmental restrictions on buying dollars, stablecoins represent a great option. 

Crypto  can also be used to make international payments and remittances. The latter has grown by up to 900% in countries such as Venezuela, Colombia and Mexico. Another increasingly popular function is the tokenization of assets, which allows investment from abroad. Brazil – ranking seventh in the world in terms of adoption, with 16 million people using crypto – is seeking to be at the forefront of regulation, and has passed a cryptocurrency law.

Meanwhile, 5.2% of Argentinians own crypto as a means of combating the economic recession and inflation using Bitcoin and stablecoins. Blockchain companies sense a great opportunity in the country, with major exchanges sponsoring local league football clubs and even the national team, which was crowned World Cup winners in Qatar in December 2022.

Colombia has the third-highest adoption in the region with a total of 40 crypto ATMs, and almost 700 establishments accepting cryptocurrency payments, especially via Bitcoin. The central bank is considering creating its own digital currency, highlighting crypto’s significance within the country. 

Mexico is the second largest recipient of remittances in the world, receiving an estimated $60 billion in 2022. It is also home to a local unicorn dedicated to the buying and selling of cryptocurrencies, so figures are expected to increase. Meanwhile, inflation has made many people bet on cryptocurrencies in Peru, which has its own digital currency project, and is ranked 35th globally in terms of adoption.

Having reviewed the growth of the crypto ecosystem in Latin America, it is clear that cryptocurrencies will be increasingly accepted by more establishments and people seeking to take advantage of their benefits. If you want to find out more about this topic and our experience in the sector, check out our blog.