- Argentina, a nation grappling with a severe economic crisis and a plunging peso, has emerged as the leader in stablecoins purchases and holdings in Latin America over the past six months, as per a report by Bitso.
Bitso’s recently published ‘Crypto Landscape in Latin America: Report 2H 2023’, which delves into the trends shaping the crypto market in several Latin American countries with notable crypto adoption, including Colombia, Argentina, Brazil, and Mexico.
Argentinians Prefer Digital Dollar to Bitcoin
Throughout the second half of 2022 and all of 2023, there has been a notable embrace of cryptocurrencies in the region, reflecting an increasing acceptance among the local population, despite market volatility and local economic difficulties.
Argentina stands out as the only country in the region where the acquisition of digital dollars surpasses that of other cryptocurrencies by nearly five times.
The report reveals that amidst economic turmoil, 60% of Argentine crypto purchases on Bitso were allocated to dollar-based stablecoins such as USDT and USDC, with just 13% of purchases dedicated to Bitcoin.
This contrasts with Colombia, Brazil, and Mexico, where stablecoin purchases ranged between 31% and 40% of total crypto acquisitions.
Notably, these stablecoins emerged as some of the “fastest-growing” cryptocurrencies in the area.
See Also: Argentina Locals Buy ‘Stablecoins’ Secretly To Escape Inflation And Strict Currency Controls
Bitso’s analysis reveals that approximately 26% of the average portfolio of users in Argentina comprises stablecoins, driven primarily by the country’s economic environment.
Bitso attributes the significant demand for stablecoins in Argentina to the prevailing political and economic context, where citizens seek alternatives to combat inflation and currency devaluation.
Argentina, the region’s second-largest country by population and third-largest economy, has long grappled with economic challenges.
The nation witnessed an alarming annual inflation rate of 211.4% in 2023, exacerbating concerns over financial stability.
The economic instability creates a strong incentive for consumers to seek more stable options to safeguard their wealth from devaluation.
In Argentina, users are inclined to swiftly convert their funds into digital dollars as a response to the continual devaluation of the peso.
Despite the economic struggles, Argentina has shown considerable crypto adoption, ranking second in Latin America and 15th globally, according to a Chainalysis report in 2023.
Latin American Users Favor Bitcoin Amidst Economic Uncertainty and Political Shifts
The nation’s recent political landscape witnessed the election of self-described “anarcho-capitalist” Javier Milei as president, signaling a potential change in economic policy.
While not fully endorsing Bitcoin, Milei has expressed favorable sentiments towards the cryptocurrency, describing it as “the return of money to its original creator, the private sector.”
Additionally, Milei has criticized central banking, labeling it “a scam.”
However, according to the report, Bitcoin remains the preferred cryptocurrency among Latin American users, accounting for 53% of portfolio holdings, slightly above the global average of 50.4%.
Stablecoins ranked second in preference, with notable growth observed in Colombia and Argentina.
In contrast, Mexico and Brazil have a lower stablecoin presence, with Brazil standing out for its diverse market portfolio encompassing Bitcoin, altcoins, and memecoins.
Furthermore, among the analyzed countries, Colombia exhibited the highest year-on-year growth in registered users on exchanges, with a remarkable 60% increase.
See Also: Argentine Government Drops Tax Opportunities For Crypto In Omnibus Bill
Brazil followed with a 31% growth rate, while Mexico and Argentina saw 18% and 16% increases, respectively.
Bitso, with over 8 million users across Latin America, serves as a significant platform for crypto trading and reflects the growing interest in and adoption of cryptocurrencies in the region, particularly in response to economic uncertainties and currency devaluation.
However, according to the report, Bitcoin remains the preferred cryptocurrency among Latin American users, comprising 53% of their portfolio holdings, slightly above the global average of 50.4%.
Bitcoin also accounted for 38% of the total crypto acquired in the second half of 2023, while stablecoins represented 30% of the acquired crypto in the region.
Disclaimer: The information provided is not trading nor financial advice. Bitcoinworld.co.in holds no liability for any trading or investments made based on the information provided on this page. We strongly recommend independent research and/or consultation with a qualified professional before making any trading or investment decisions.
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