Cryptocurrencies such as Bitcoin, and others have the potential to address several issues. Recently, a blockchain analytics firm published new research that once more underlines the importance of cryptocurrencies. For example, the amount of crypto transactions between South America and Asia surpassed $1 billion in 2019. It means people as well as companies are ready to use cryptocurrencies.
Interestingly, the study “Latin America Mitigates Economic Turbulence with Cryptocurrency”, analyzed trends in Latin America between July 2019 and June 2020. As a reminder, Latin America consists of 20 countries and 14 dependencies.
According to Chainalysis the company that published the research, problems regarding the banking access issues, created the unique patterns of cryptocurrency usage, when it comes to crossborder commercial-related transactions.
People should take into account that, North America, and Western Europe, represent the biggest source of remittances to Latin America.
Nevertheless, transactions from East Asia lead the way when it comes to the volume of crypto transactions. Interestingly, many of the transactions between Latin America and Asia are commercial transactions between companies.
Crypto markets and interesting details
Chainalysis was unable to determine the single driving factor as there are differences across Latin America. It is not surprising as countries have different political and banking systems.
For example, in Venezuela, person-to-person exchanges represent the driving factor. In Brazil which has the largest economy in Latin America, a large professional market drives adoption.
It is worth mentioning that, a substantial commercial market drives adoption among Argentina, Paraguay, and Brazil as they trade goods, often imported from the People’s Republic of China.
As can be seen from the information stated above, the popularity of cryptocurrencies is growing in Latin America. Interestingly, Bitso, one of the biggest cryptocurrency exchanges in Latin America reached 1 million active users prior to its launch in Brazil. Moreover, this fact once more underlines the importance of cryptocurrencies in the region.