The driving forces behind crypto adoption in Latin America in 2022

Inflation, cross-border payments, assets tokenization and nonfungible tokens (NFTs) were among the large drivers for crypto adoption crossed Latin America successful 2022, sources successful the portion told Cointelegraph, with breathtaking examples of advancement crossed galore countries. 

Latin America made up 9.1% of the planetary crypto worth received successful 2022, reaching $562 cardinal betwixt July 2021 and June 2022 — representing maturation of 40% successful the period. Four Latin American countries ranked among the apical crypto adopters successful the latest Chainalysis Global Adoption Index.

Major developments person contributed to these results implicit the past 12 months. Authorities person been moving connected cardinal slope integer currencies (CBDCs), implementing standards for concern operations, and clarifying regulations. Meanwhile, galore companies successful Latin America person been exploring ways to utilize blockchain exertion and integer assets to lick the assorted challenges that countries successful the portion face.

"The portion is ripe with opportunities for cryptocurrency adoption," noted a spokesperson for cryptocurrency speech Bitso, which operates successful Brazil and Argentina, among different countries successful Central America, adding that:

"For some Argentina and Colombia, the impacts of ostentation person driven galore to usage cryptocurrency. [...] For Colombia, remittances are different important operator of adoption, adjacent surpassing ember arsenic a operator of dollar gross successful 2022 according to a Banco de Bogotá report."

Crypto Latam

Institutional adoption and regulatory developments person paved the mode for Mercado Bitcoin to contented Brazil's archetypal stablecoin, the MBRL, which is backed one-to-one by the Brazilian fiat currency done a concern with Stellar. The country's cardinal slope is scheduling for 2023 the trial of its integer currency, and for 2024, its afloat merchandise to implicit 200 cardinal people. Also, a precocious approved measure volition modulate virtual assets providers aft years of discussions successful Congress.

"Brazil has been a large subordinate successful the crypto system communicative successful Latin America for respective reasons: organization adoption, regulatory advances, and wide nationalist buy-in. In that sense, nationalist assemblage engagement is inevitable - this represents an highly affirmative move, which enhances the crypto-active manufacture portion providing greater information for investors," noted Fabrício Tota, manager astatine Mercado Bitcoin.

Colombia also plans to present its integer currency, aiming to summation transparency and forestall taxation evasion, which is estimated to relationship for astir 8% of the country's gross home product. In Chile, the cardinal slope has delayed plans for the issuance of the integer Chilean peso for deeper investigation of benefits and risks.

To combat ostentation successful Argentina, cities specified arsenic Buenos Aires and Mendonza started accepting cryptocurrencies for taxation payments. At the aforesaid time, Santa Fe Province plans to instrumentality crypto mining activities to rise funds for obstruction infrastructure upgrades. These whitethorn beryllium timely initiatives fixed that Argentina's ostentation complaint is forecast to beryllium 73.5% astatine the extremity of 2022, according to FocusEconomics panelists. 

"Argentina is becoming a hub for bringing tech improvement and resources to Latin America from the remainder of the world," said Ryan Dennis, elder manager astatine Stellar Development Foundation. "This people flows into blockchain improvement with a ample fig of startups successful the state and frankincense a increasing fig of developers and founders moving unneurotic successful blockchain and crypto."

Tokenization

Latam's crypto abstraction has besides benefited from tokenization of concern products, allowing galore to entree products that were antecedently lone disposable to ample investors. "Tokenization of integer assets has been increasing implicit the past years," including assets specified arsenic firm bonds and existent property debts, noted Dennis. 

Another crushed contributing to the emergence of tokenization of fiscal assets is the high-interest rates successful the region. Most Latin American countries person double-digit involvement rates, which prompts investors to question assets with predictable returns and little volatility. This is an perfect script for fiscal companies moving connected tokenization and decentralized concern (DeFi) solutions.

Music and creation tokenization are besides trending successful Latin America. "One gyration that has happened successful LatAm is giving artists a model into the satellite of Web3," Dennis explained. "There are a batch of artists that person been capable to get retired of their section communities and state to go internationally renowned. That’s huge."

Crypto manufacture challenges successful the portion are akin to those seen worldwide: A deficiency of acquisition astir blockchain technology, insufficient regulation, and a shortage of trust. "The firms and projects that volition pb the crypto successful Latin America adjacent twelvemonth volition beryllium the companies thoughtfully addressing the request for accrued transparency and trust," noted Bitso's spokesperson.