The impact of the cryptocurrency field has been felt in developing nations who have lost faith in their own native currencies. The promise of a decentralized economy that will ensure an individual’s capital is safe has always been an alluring factor of the industry.
Over the past couple of months, it was noticed that cryptocurrencies such as Bitcoin had a growing fanbase in Latin America. This has occurred in conjunction with regional revolutions and inflated economies.
Citizens of many unstable regions have turned to Bitcoin and other cryptocurrencies during times of need. Despite the rumors and misconceptions about Bitcoin, millions of people use the cryptocurrency every day for day to day activities. Latin America has always been known as a volatile region but the increasing number of conflicts has turned it into ground zero for a new economy.
Studies have shown that crypto attracts the young crowd who are invested in developing an economy that can be sustained easily. Citizens in countries such as Brazil, Colombia, and Venezuela are all hot spots for crypto and there were multiple reasons behind it. Countries in Latin America have been plagued by inflation lately, with Venezuela becoming infamous for hyperinflation.
To counter the crumbling economy, the Nicholas Maduro led government even launched their own crypto called Petro, but to no avail. Instead of opting for the state-backed ‘Sovereign Bolivar’, Venezuelans were still using Bitcoin and Dash to bypass the government. According to LocalBitcoins, Venezuela remains one of the world’s top markets for cryptocurrency P2P transactions.
Even mass-market chains such as Burger King have embraced the change by allowing Bitcoin payments in their Venezuelan stores. The cryptocurrency usage in the country had taken a hit due to the persistent black-outs. Despite this, the amount of Bitcoin used to conduct cross border transactions has only grown. The remittance market has hence grown steadily in Latin America.
PlataForma, a blockchain startup has devised ways to conduct cross border transactions between Chile and Venezuela. This occurred in spite of all the government regulations present in Venezuela. A large number of unbanked people in these regions have utilized blockchain technology to take the power back from ‘the man’.
There are some positive developments in the region though. Just last year, Brazil considered cryptocurrency transactions as part of their national inflow and urged users to reveal their holdings. This allowed Brazil’s Recieta Federal to calculate that there were transactions worth $3 billion active in the region.
Colombia, on the other hand, has decided to utilize the core idea behind cryptocurrencies, blockchain technology. To move forward in new financial avenues, the Attorney General of Colombia has proposed new plans to track payments. Blockchain technology is aimed to improve transparency in fund allocation by the state to school canteen programs.