Bitcoin Rush in South America, Explained.
Bitcoin and other cryptocurrencies have been experiencing growing mass adoption in South America. Data shows that Brazil, Colombia, Chile, and Argentina all have double digits when it comes to crypto adoption. It is especially interesting since globally, the rate of crypto adoption stands at less than 1 percent.
There is no doubt that criminal enterprises and corruption entities have played a role in the adoption of crypto in Latin America. However, a big part of the push for Bitcoin adoption is driven by innovative startups seeking to combat theft, corruption, and low productivity.
The Crypto Trend in South America
One of the major reasons why the rate of Bitcoin adoption is so high in South America is that a huge, tech-savvy population happens to also be unbanked. In a study conducted in 2018, it was found that about 64% of people in Latin America owned a smartphone. By 2025, around 78% of the population will own a smartphone. Besides that, the study found that around 90% of unbanked people would have access to a smartphone.
Why the Rise in Bitcoin Adoption
A major reason for Bitcoin adoption is the economic situation in the region. For instance, Argentina experienced an inflation of 53.9% in 2019. Brazil, one of the biggest economies in the region, is also experiencing a similar problem — in 2015, their inflation rose to the highest it had ever been in 13 years. While crypto volatility is still an issue, cryptocurrencies still seem like a better alternative to holding on to the national currencies.
Remittances are Cheaper and Faster
Another major reason for increased crypto adoption is remittances. In 2016, the remittances sent to Latin America reached new record levels. In general, the region is highly reliant on remittances, mainly from the US.
However, the cost of remittances can be high using conventional methods. Besides that, there is always the risk of the funds being diverted or stolen via conventional methods. As a result, more people are turning to crypto to ensure faster and more secure transactions. A good example of this is Valiu, a Colombian company that secures remittances to Venezuela using blockchain to prevent theft or loss.
Lower Barrier of Entry
In Latin America, entering the crypto world has a lower entry barrier than the traditional financial sector. A recent study found that around half of the people in the region did not have access to basic financial services. However, the region has one of the highest rates of mobile phone adoption in the world. A World Bank study found that around 55% of the people own a mobile phone, which is 15 percent higher than the average for most developing nations. As a result, a huge unbanked population with easy access to the internet makes crypto lucrative.
The Special Case of Venezuela
Venezuela’s economy has been ravaged by sanctions, corruption, poor government policies, and hyperinflation. It has caused a mass exodus from the country as well as increased adoption of crypto. The nation even attempted to launch a national digital currency, but has seen varying degrees of success. Most people in the country today prefer to complete transactions in crypto or other fiat currencies instead of their national digital currency.
Various factors have led Latin Americans to turn to crypto. The key determining factor is the ability to preserve their wealth. Not only does crypto allow for wealth preservation, it also provides an option for making a profit from users’ crypto holdings even as they wait for the economic situation to improve.
One option is the Haru platform which lets users securely store their crypto while earning interest from it. On Haru, users can earn interest of as high as 8.5% annually while storing their crypto securely. Users preserve their wealth while earning from it, which is a great option since investing in the current economic climate might not offer any returns.
Haru is a trusted digital asset management platform. We provide up to 16% earn rates for monthly deposits of BTC, ETH, USDT, and Terra KRT. What we offer aims to shift a paradigm of investment — investing in crypto can be stable and comfortable, too. Crypto in, more crypto out. It’s that simple.
Official Website: www.haruinvest.com
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