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Cryptocurrencies are an attractive option in crisis situations in Latin America

Various economic reports from international organizations confirm that Latin America will be hard hit by the pandemic. In this context From Bitso, they confirmed to Cointelegraph en Español that cryptocurrencies are an important factor that can offer some solutions in times of crisis.

“All economic reports published by international organizations repeat the warning: Latin America will be the region hardest hit by the pandemic. For the Latin America and the Caribbean Economic Commission (ECLAC), this is the region’s biggest economic crisis in a century. According to the World Bank, the gross domestic product of the area will decrease by 7.9% in 2020. A. Unprecedented collapse in recent history, ”they stated diagnostically.

Cryptocurrencies are an attractive option in crisis situations in Latin America
Cryptocurrencies are an attractive option in crisis situations in Latin America

However, they also reaffirmed that they see signs that they are countering the crisis in that region, and that these are those which are reported in a report as “Latin America eases economic turmoil with cryptocurrencies“, Carried out by Chainalysis, which analyzes the trends of cryptocurrencies in Latin America between July 2019 and June 2020

This report highlights the importance of cryptocurrencies in Latin America in escaping inflation and their importance in maintaining levels of sending and receiving remittances reported by cryptocurrency platform Bitso in mid-2020, from where they reported growth of 320% in only six months in this area.

It has also been proven that Two of the main problems leading to the increased use of cryptocurrencies in this region are the barriers to accessing the traditional banking system and the need for wire transfers.

In addition, inflation is another reason why Latin Americans are introducing more and more cryptocurrencies in their everyday lives. Cryptocurrencies offer solutions to this problem that is negatively affecting the lives of thousands of people.

Miguel Kudry, Director of Financial Services at Bitso commented:

“In addition to the problems of access to the traditional financial system, countries such as Argentina or Mexico can also represent stable coins such as DAI, i.e. crypto currencies that are linked to the price of the dollar, for example, to counteract inflation and to protect value and savings without the need for a bank account in dollars. ”

Even though The cryptocurrency par excellence for transactions is still BitcoinThe rise in stable cryptocurrencies is not negligible data, shown in the following figure, which shows the total volume that cryptocurrencies in Latin America sent and shared by Bitso between July 2019 and June 2020:

Currencies included: BAT, BCH, BNB, BTC, CRO, CRPT, DAI, ETH, GNO, GUSD, HT, LEO, LINK, LTC, MCO, MKR, MLN, OMG, PAX, TUSD, USDC, USDT, WETH, ZIL , ZRX

Not only Latin American companies have problems with banks. Many people are also unable to get bank accounts, which is another factor behind the adoption of cryptocurrencies.

In this way, Latin Americans have discovered the potential of cryptocurrencies to somehow manage the economic crisis that has hit different areas of society.

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