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Inflation, cross-border payments, asset tokenization, Non-Fungible Token (NFT) It will be a major driver of crypto adoption across Latin America in 2022, sources in the region told Cointelegraph.
Latin America will account for 9.1% of the global cryptocurrency value received in 2022, reaching $562 billion between July 2021 and June 2022, showing a 40% growth over the period. Four Latin American countries rank among the top crypto adopters in the latest Chainalysis Global Adoption Index.
Major developments over the last 12 months contributed to these results. The authorities are working on a central bank digital currency (CBDC), implementing standards for business operations and clarifying regulations. Meanwhile, many companies in Latin America are exploring ways to leverage blockchain technology and digital assets to solve various challenges faced by countries in the region.
The region is full of opportunities to adopt cryptocurrencies, said a spokesperson for Bitso, a cryptocurrency exchange that operates in Brazil and Argentina, among other countries in Central America. I’m here.
For both Argentina and Colombia, the impact of inflation has pushed many to use cryptocurrencies. […] Remittances are another key driver of adoption for Colombia, even surpassing coal as the driver of dollar income in 2022, according to a report by the Bank of Bogota. “
Institutional adoption and regulatory developments paved the way for Mercado Bitcoin to issue Brazil’s first stablecoin, MBRL. MBRL is backed 1:1 by Brazilian fiat currency through a partnership with Stellar. The country’s central bank plans to test the digital currency in 2023, with full release to over 200 million people in 2024. Regulates virtual asset providers after years of debate on.
Brazil has played a major role in the Latin American cryptocurrency economy for several reasons: institutional adoption, regulatory progress, and public buy-in.In that sense, public sector involvement is inevitable. This represents a very positive move, strengthening the cryptocurrency industry while providing greater security for investors, said Fabrcio Tota, director of Mercado Bitcoin.
Colombia too Planning to introduce digital currency, aims to increase transparency and prevent tax evasion, which is estimated to account for almost 8% of the country’s gross domestic product.In Chile, the central bank Delay in Issuance Plan of Digital Chilean Peso Deeper analysis of benefits and risks.
To combat inflation in Argentina, cities such as Buenos Aires and Mendonza have started accepting cryptocurrencies to pay taxes.At the same time, the province of Santa Fe Planning a crypto mining implementation Activities to raise funds for upgrading rail infrastructure. These could be timely initiatives as Argentina’s inflation rate is projected to hit 73.5% at the end of 2022, according to FocusEconomics panelists.
Ryan Dennis, Senior Manager, Stellar Development Foundation, said: This has naturally flowed into blockchain development by a large number of domestic start-ups, increasing the number of developers and founders collaborating on blockchain and crypto.
Latam’s cryptocurrency space has also benefited from the tokenization of investment products, making products previously available only to large investors more accessible. The tokenization of digital assets has grown over the past few years, said Dennis, including assets such as corporate bonds and real estate debt.
Another reason contributing to the rise of tokenization of financial assets is the region’s high interest rates. Most Latin American countries have double-digit interest rates, prompting investors to look for assets with predictable returns and low volatility. This is the ideal scenario for financial companies working on tokenization. Decentralized Finance (DeFi) solution.
Tokenization of music and art is also trending in Latin America. One of his revolutions in Latin America is to give artists a window into his Web3 world, Dennis explains. “There are many artists who have managed to break out of their local communities and countries to become internationally famous. It’s huge.”
The challenges of the cryptocurrency industry in the region are similar to those seen globally. Lack of education, poor regulation and lack of trust in blockchain technology. A Bitso spokesperson said, Next year, the leading cryptocurrency companies and projects in Latin America will be those that are cautious about the need to increase transparency and trust.
