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Despite the bear market that has permeated the global economy since the start of 2022, crypto adoption has continued to grow, especially across emerging markets.
To this point, a study shows that even though the value of most premier digital assets has been on the decline recently, the rate at which retail and institutional players have been adopting crypto is higher than what was witnessed during the 2019 pre–bull market.
Using metrics such as CeFi/DeFi (centralized/decentralized finance) use and P2P (peer-to-peer) trading volumes, the study concluded that individuals living in countries across Latin America, South East Asia and Eastern Europe are currently investing the largest sums of money savings into digital assets.
Latin America, in particular, has continued to showcase rising adoption, largely due to soaring inflation levels as well as as a host of geo-social factors like rising political instability and a lack of access to high-quality traditional finance services.
Adoption is primed to grow across Latin America ere’s why
A number of Latin American nations have continued to struggle with insanely high levels of inflation recently, with countries like Venezuela and Argentina currently experiencing hyperinflation rates of 75% and 115%, respectively.
Similarly, countries like Brazil, Chile, Colombia, Mexico and Peru too have been plagued by similar issues albeit on a smaller scale forcing people living within these nations to adopt crypto assets (such as Bitcoin).
Another reason why Latin Americans are turning toward crypto is because of the political instability turmoil pervading the region. According to research studies, Latin America is currently one of the most unstable regions in the world (in the post-war era), with armed conflict primed to keep growing in the future.
As a result, many people have adopted censorship-resistant digital assets that are tough for government authorities to confiscate.
Lastly, with the DeFi sector growing from a cumulative valuation of $800 million to over $500 billion over the last 30 months, several young Latin Americans have started to employ crypto protocols as replacements for traditional financial institutions for a variety of different reasons including sending/receiving funds, drawing interests on their savings, etc.
Crypto ed setting Latin America up for a bright economic future
Many experts believe that mass education is essential when it comes to promoting financial empowerment and spurring mass adoption across Latin America. To this point, it is estimated that approximately 15% of the world’s supply of Bitcoin (BTC) is currently circulating across the region.
However, despite this, education continues to remain a major obstacle to adoption. As per a recent report, 99% of Brazilian and Mexican crypto enthusiasts are ignorant about the basics of blockchain, DeFi, Web 3.0, etc, preventing them from harnessing the true power of this novel technological paradigm.
That being said, there currently exist several educational efforts across Latin America, each embodying a slightly different approach to bringing more people into the cryptocurrency and blockchain ecosystem.
For example, the National Autonomous University of Mexico (UNAM) recently introduced a financial engineering specialization course that includes models on crypto and blockchain topics. Similarly, in Colombia, the government announced the creation of several tools devoted to cryptocurrency education.
Also, many platforms have emerged in recent times that allow users to seamlessly educate themselves about all things crypto.
Therefore, as we head into a future driven by decentralized projects, it is of utmost importance that crypto education continues to grow, especially in regions afflicted by economic and political turmoil.
Adoption will continue to grow, numbers suggest
Statistical evidence shows that Latin America leads to roost when it comes to crypto adoption globally. This is best highlighted by the fact that in September 2021, El Salvador became the first country in the world to legalize the use of Bitcoin within its borders.
Not only that, following the move, President Naib Bukele continued to buy the flagship cryptocurrency, with the nation’s coffers currently possessing 2,381 BTC.
Similarly, Brazil is widely considered to be one of the most important markets for Web 3.0 projects, with the country’s population facilitating crypto transactions faster than in any other country world today.
To put things into perspective, Receita Federal, Brazil’s financial regulator, revealed that between January and November 2021 alone, the country’s residents traded $11.4 billion worth of stablecoins a metric that was nearly of the number recorded in 2020.
Furthermore, the country houses some of the region’s best crypto platforms, including Mercado Libre, an e-commerce firm that currently operates an extremely popular exchange, and Nubank, a digital banking ecosystem that was able to accrue over one million users for its crypto trading desk just a month after its launch.
Lastly, a recent study found that Latin Americans are the most bullish on the future prospects of the crypto industry compared with any other region across the globe. In fact, earlier this year, a Bitcoin ATM was installed on the premises of the Mexican senate.
Thus, it will be interesting to see how the future of the crypto economy plays out within this region over the coming few months and years.
Gabriela Reyes is a Spanish entrepreneur with a growing footprint in the blockchain scene both globally and in Spanish-speaking countries. Reyes’ highest profile launch so far, Lively Verse aims to use the immense power of the media to raise mass awareness about blockchain and helps companies and startups raise funds for their projects as well as give them exposure.
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Source: https://dailyhodl.com/2022/09/27/latin-americas-crypto-clout-continues-to-grow-but-education-is-still-needed-for-sustainable-adoption/