In Latin America, stablecoin-based remittances are gaining traction, Chainalysis revealed in its most recent report on 9 October 2024.
Due to large inflation issues, the stablecoin market is well above the global average in Latin America.
In fact, stablecoins now account for approximately 70% of the share of indirect flows from Brazil’s local exchanges to global exchanges.
Brazil’s high levels of stablecoin activity, as well as general interest in digital products and services, are drawing significant interest from major crypto players. Just recently, Circle announced its official launch in Brazil in May 2024.
Furthermore, institutional adoption in the region has been given momentum by regulatory discussions and TradFi interest.
Related: Brazil’s Largest Bank Launches Crypto Trading Services To Its 60 Million Customers
Introduction Of BTC, ETH ETFs: Main Reason Behind Brazil’s Increased Institutional Crypto Activity?
Brazil, for example, is seeing a rise in institutional crypto activity.
In fact, the monthly value of institutional-sized transactions (i.e. greater than $1 million) increased by approximately 29.2% between the last two quarters of 2023, and 48.4% between Q4 of 2023 and Q1 of 2024.
Talking to Chainalysis, André Portilho, Head of Digital Assets at investment bank BTG Pactual said, “Investors are increasingly integrating digital assets into their asset allocation strategies, viewing them as valuable alternative investments that offer the potential for enhanced returns. The consolidation of Bitcoin and other cryptocurrencies as established investment options has been crucial in this shift.”
According to Potilho, Brazil’s growth can be partially attributed to regulatory evolution. More importantly, the entry of American institutions into the crypto market, especially with the introduction of Bitcoin and Ethereum ETFs, can be behind Brazil’s growth.
🇦🇷 Argentina has surpassed Brazil in crypto inflows, with $91 billion between July 2023 and June 2024. Argentina’s stablecoin market is booming, with transaction activity 17% above the global average, driven by inflation. 💸 #Argentina #Crypto #Stablecoins #Inflation #Blockchain pic.twitter.com/tHgXgeWQGw
— 137Labs Global (@137LabsEN) October 10, 2024
Four Of Top 20 Countries In Crypto Adoption Are From Latin America
When it comes to crypto, Latin America is the second fastest-growing region, Chainalysis found. “With a year-over-year (YoY) growth rate of approximately 42.5%, LATAM recorded the second-most significant year-on-year growth, surpassed only by East Asia.”
Much of this growth has been driven by robust and diverse markets. Four of the top 20 countries in crypto adoption are in Latin America. They are Brazil (10), Venezuela (13), Mexico (14) and Argentina (15).
Recently, a Binance survey found that there is a strong preference for long-term crypto investments over day trading among Latin American investors. The survey said that 50.3% of respondents view cryptocurrency primarily as a long-term savings and investment tool.
Related: Majority Latin American Crypto Users Go For Long-Term Holding: Binance Survey
Disclaimer: Crypto is a high-risk asset class. This article is provided for informational purposes and does not constitute investment advice. You could lose all of your capital.
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