Global adoption of cryptocurrencies would mitigate the costs of transaction fees and improve network security and privacy for the end consumer who has difficulty accessing adequate financial services. On the other hand, companies can offer transparency and benefit from greater global reach, reaching new markets. However, the introduction of a new and completely different system from those we already use is limited by a lack of technological knowledge and regulatory restrictions.
The crypto industry can offer much more than tokens, even if the ADA USDT Price shows us how cryptocurrencies are moving towards mass adoption. Decentralized applications, non-fungible tokens, and many other similar tools have the ability to optimize systems and handle security at a higher level than our current methods.
However, the adoption of cryptocurrencies would likely help developing countries overcome difficulties. If people had access to financial services, poverty could decrease, while economic growth could be supported. Central American countries, such as El Salvador, have already started playing with Bitcoin, but South America is close behind. These are the countries that fight the most for financial accessibility.
Venezuela and its cryptocurrency Petro
Venezuela has been ranked the first Latin American country in the Global Crypto Adoption Index as of 2023, a top analysis of the value of centralized services, P2P commerce, and the value of DeFi. The large volume of transactions in bolivars since 2020 made Venezuela a country with enormous potential for cryptocurrency adoption, and cryptocurrencies were used as a way to hedge against inflation.
While Bitcoin was not really a success, most people would use stablecoins, which are pegged to an official fiat currency, such as the US dollar, and offer much more security and stability in the market. Still, the government eliminated the potential.
In 2018, President Nicolรกs Maduro launched the country's first digital token, backed by oil reserves, to help the country face the economic crisis. However, the project was recently concluded because experts believed it would lead to hyperinflation.
Brazil and the first Bitcoin ETF in Latin America
Brazil is the second most developed country in terms of readiness for cryptocurrency adoption, considering the growing technology industry. The country's government supports cryptocurrency companies, leading to their expansion in the Brazilian market and setting the tone for future companies. Regulatory advances and institutional adoption are driving mass adoption of cryptocurrencies, which can help Brazil prosper. Thus, the first BTC ETFs approved in Latin America were operated by the Brazilian Securities and Exchange Commission.
The ecosystem led to the emergence of the country's first stablecoin, MBRL, with the help of Mercado Bitcoin, backed by the Brazilian currency in collaboration with distributed ledger platform Stellar. The token is planned to be launched in 2024 to more than 200 million citizens. Still, the use of other cryptocurrencies will also be encouraged, as one of the country's bills will regulate virtual asset providers.
Argentina and the risks of the dollar in the black market
Argentina was one of the countries with the greatest challenges in terms of financial accessibility because the Argentine peso was affected by double-digit inflation, which reached shocking statistics in 2022. The devaluation of the peso exacerbated Argentina's dependence on the US dollar, which generated numerous taxes. Therefore, Argentina shifted its interest towards Bitcoin, Ethereum, and stablecoins because they are more accessible and offer cheaper and faster transactions.
Considering that many citizens face massive risks when purchasing US dollars on the black market, cryptocurrencies could help mitigate these digital dangers. At the same time, because cryptocurrencies rely heavily on decentralization, banks will not limit citizens from accessing their accounts or creating new ones.
Now, Argentines take advantage of cryptocurrencies as store-of-value investments, remittances, and DeFi activities. However, many pay daily purchases and taxes with cryptocurrencies.
Colombia and remittances for adoption
Colombia is a thriving crypto environment, where the government supports the expansion of blockchain and crypto instruments. That is why cryptocurrency companies contributed to the development of the market, one of which created the peso stablecoin in partnership with Polygon, the innovator blockchain solution.
The central bank of Colombia has also collaborated with Ripple to explore blockchain and present it to the general public. Furthermore, despite not having clearly established tax guidelines, Colombia has mitigated tax evasion with the help of the national digital currency.
In 2021, the country also experimented with e-Peso, the digital version of fiat currency, which attracted more attention from the crypto community for its investment potential.
Mexico and its hot spot for cryptocurrencies
Finally, Mexico is one of the Latin American countries that contributed to the development of cryptocurrencies in the market by passing several laws to regulate these assets. Lately, the Bitcoin Lighting system partnered with a local company, Grupo Salinas, to improve the adoption of the currency and offer citizens a new way to pay their Internet bills through the network.
Tether was also a game-changer for the crypto environment in Mexico because it provided peso-pegged stablecoins on blockchains like Ethereum and Polygon, fueled by the massive expansion of Bitcoin in the country. This, along with the Bitcoin ATMs installed in the Mexican Senate building, laid the foundation for greater transparency and trust for citizens.
One of the Mexican senators proposed that Bitcoin become legal tender, like in El Salvador, because it would have a positive impact on the economy. The Senator also stated that Bitcoin adoption would address inequality and financial inclusion at a higher level, but the project has remained stalled due to El Salvador's lack of success in Bitcoin adoption. Although many other countries wanted to follow his example, these economies are not prepared to support the technical requirements of cryptocurrency.
Bottom line
The cryptocurrency market is booming and has entered various financial environments, such as Latin America, to bring improvements and technology. Countries like Argentina, Colombia and Mexico have been adopting some stablecoins for people to address their limited banking access. On the contrary, others have implemented their own digital currencies to facilitate transactions and mitigate the growing and overwhelming inflation.
