Latin America is pivoting towards blockchain-based solutions to meet its banking needs amid escalating inflation, according to insights from the co-CEO of Bybit LATAM.
With traditional banking systems struggling, local citizens are increasingly adopting cryptocurrencies, specifically stablecoins, as substitutes for conventional banking services. This shift allows them to make digital payments and establish savings with stablecoin holdings.
“LATAM adoption is quite high. People are using stablecoins for daily life, so it’s a whole different market,” said Patricio Mesri, the co-CEO of Bybit’s Latin American division. “Crypto is actually changing the lives of people. You see adoption in Argentina, Venezuela, Bolivia, and Mexico increasing rapidly.”
Some innovative applications include using stablecoins to avoid hefty SWIFT remittance fees and securing crypto-backed loans for large acquisitions.
Inflation Pressures Lead to Stablecoin Adoption
Countries such as Argentina, which has seen inflation rates exceed 100%, are witnessing a dramatic increase in the demand for stablecoins pegged to the US dollar, including USDC and USDt. A local exchange, Bitso, reported that stablecoin transactions comprised 39% of its total trades in 2024, highlighting their significance in the market.
The challenges of banking access have resulted in systemic inefficiencies across the region, including significant technological barriers that inhibit investment flow into Latin American markets.
Adopting blockchain technology could alleviate some liquidity issues as per a recent report from Bitfinex Securities. Tokenization of real-world assets may provide broader access to capital and reduce the cost of raising funds significantly.
“For decades, businesses and individuals, particularly in emerging economies, have struggled to access capital through legacy markets and organizations,” remarked Paolo Ardoino, CEO of Tether and CTO of Bitfinex Securities. “Tokenization actively removes these barriers.”
Recent analytics indicated that Latin America ranked as the seventh-largest cryptocurrency market globally in 2023, showcasing its evolving financial landscape.
