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Press Release
A new report has identified that cryptocurrencies and blockchain technology are rising in popularity and confidence across the Latin American region, with the population embracing its potential for increased investment returns, financial inclusion, and global financial mobility.
The report, commissioned by Sherlock Communications, highlights key aspects of the blockchain landscape in {21} countries, including an exclusive survey with 3,500 people into the state of cryptocurrencies and blockchain in six Latin American countries: Brazil, Mexico, Argentina, Colombia, Peru, and Chile.
It was found that as the regulatory landscape begins to shift, authorities have been working to develop Central Bank Digital Currencies (CBDCs), and institutional players have been able to enter the ecosystem in a significant way. Indeed, 2022 was the year in which banks, fintechs, centralized exchanges, and hedge funds created improved interfaces and began the process of facilitating crypto adoption in a number of different ways.
Luiz Hadad, Lead Blockchain researcher at Sherlock Communications, highlights:
“The crypto ecosystem is constantly changing, and this time there are two main aspects to consider when reading the 2023 Report: we’re in a bear market and facing lot’s of regulatory pressure. Since the collapse of the stablecoin Terra Luna and the fraud on crypto exchange FTX, regulators all over the world (specially in the US) are watching the space closely - taking actions to protect investors and their domestic markets.”
“Some countries have their reasons to be more conservative in their regulations, like Argentina, for example. Restrict crypto regulations was part of their debt restructure deal with the IMF. On the other side, there are countries that passed friendly regulations, which can foster innovation and attract crypto projects for the long term.”
“We found grassroots adoption coming from the usage of stablecoins and many mining projects looking for cheap and renewable energy sources in places like Paraguay and Argentina. Latin American countries can benefit from the current conditions in the long term, and have an opportunity to grow adoption rates once the market cycle changes to a bullish perspective.”
The survey found that 35% of Latin Americans now see cryptocurrencies as a safe investment, and the population is increasingly of the view that the region is catching up with the rest of the world, with number of people believing their countries are behind dropping from 44% in 2020 to 34% in 2023. Brazilians were the most confident that their country had made advances in the space, with the number of people believing their country was behind the rest of the world dropping from 37% in 2020 to 27%.
Demand for safe and reliable crypto-trading platforms is on the rise, and countries such as Colombia have seen demand increase from 39% in 2021 to 52%, while Brazil’s and Mexico’s rates have increased from 39% in 2021 to 46% and 37% to 44%, respectively. Moreover, the rate of Latin Americans demanding easy-to-use crypto-trading platforms remains stable at 38%.
Meanwhile, as governments move to introduce regulations, potential investors are watching closely, with the number of Latin Americans waiting for better regulation before investing rising from 29% in 2021 to 42%. Increased demand for regulation was strongest among Colombian respondents, with demand jumping from 39% in 2021 to 53%. As the Colombian government moves to meet this increased demand by introducing a regulatory sandbox, investment rates in crypto could begin to rise along with friendly regulations.
Despite rising inflation across the region, investment in crypto as a means of protection from inflation and financial instability is only the third-most popular motivating factor for investing in crypto, sitting at 32%. Meanwhile, saving money for the future appears to be the strongest driving factor, with almost half (46%) citing it as a reason to invest in crypto.
Patrick O’Neill, Managing Partner at Sherlock Communications, said:
“This report highlights the regional growth of blockchain and related technologies, to help bridge the gap between Latin America and other parts of the world. Our team of experts is committed to providing accurate and up-to-date information to our clients, partners, and readers.”
“The data indicate that despite 2022 being a challenging year for the blockchain community, over the past 12 months, adoption rates have continued to increase, albeit at a slower pace. Governments and institutions are starting to catch up with the technology, and countries such as Brazil and El Salvador are creating friendly regulations for the crypto ecosystem, each of them with their own terms.”
“Latin America is, without doubt, a trendsetter in the adoption of Web3 technologies, and some of the most innovative blockchain startups and projects in recent years have come from the region. The region should continue to evolve into an increasingly attractive hub for cryptocurrency trading for both investors and consumers.”
Other Key Findings
- A lack of financial means remains a barrier to investment, with 33% of Latin American respondents citing it as a reason they do not invest.
- Online courses are the most desired means of learning more about blockchain and cryptocurrencies, with 52% of respondents citing it in their responses.
- Only 11% of Latin American respondents stated they were currently investing in cryptocurrencies.
- 38% of Latin American respondents stated that social media influencers were the source from which they have heard the most about crypto in the last 12 months, while a further 38% cited social media and television ads as their main source.
- 20% of Latin American respondents believe that widespread use of crypto will occur in the distant future, while 21% believe it will happen in the next few years.
Disclaimer
The views and opinions expressed in this article are solely those of the authors and do not reflect the views of Bitcoin Insider. Every investment and trading move involves risk - this is especially true for cryptocurrencies given their volatility. We strongly advise our readers to conduct their own research when making a decision.