Loading...

Argentina leads Latin America in stablecoin adoption amid economic crisis

TL;DR

  • Argentina leads Latin America in stablecoin use due to economic crisis and peso devaluation.
  • Bitso’s report shows that 60% of Argentine crypto purchases are stablecoins, five times more than other cryptos.
  • Despite Bitcoin’s dominance, stablecoins gain traction in Argentina amid inflation concerns.

Argentina has emerged as a frontrunner in adopting stablecoins within Latin America, reflecting a strategic response to the nation’s economic turmoil. Bitso, a Mexican-founded crypto exchange, released its ‘Crypto Landscape in Latin America: Report 2H 2023,’ shedding light on the cryptocurrency trends across several Latin American countries.

Stablecoins prevail in Argentina

Amidst severe economic challenges and a plunging peso, Argentina has witnessed a significant surge in stablecoin adoption. Bitso’s report reveals that 60% of Argentine crypto purchases on the platform were allocated to dollar-based stablecoins like USDT and USDC, surpassing investments in other cryptocurrencies by nearly five times. 

This contrasts sharply with neighboring countries like Colombia, Brazil, and Mexico, where stablecoin purchases ranged between 31% and 40% of total crypto acquisitions.

The prevailing economic instability in Argentina has spurred the demand for stable alternatives to combat inflation and currency devaluation. With an annual inflation rate reaching 211.4% in 2023, citizens actively seek ways to safeguard their wealth. Bitso’s analysis indicates that approximately 26% of the average crypto portfolio in Argentina comprises stablecoins, driven primarily by the country’s economic environment.

Argentina’s economic landscape

Argentina, Latin America’s second-largest country by population and third-largest economy, has long grappled with economic challenges. The nation’s economic instability incentivizes consumers to seek more stable options to protect their wealth from devaluation. This has propelled Argentina to rank second in Latin America and 15th globally in terms of crypto adoption, according to a Chainalysis report in 2023.

The recent political landscape in Argentina, marked by the election of self-described “anarcho-capitalist” Javier Milei as president, signals a potential shift in economic policy. While not fully endorsing Bitcoin, Milei has expressed favorable sentiments towards it, criticizing central banking and describing it as “the return of money to its original creator, the private sector.”

Bitcoin dominance despite stablecoin surge

Despite the surge in stablecoin adoption, Bitcoin remains the preferred cryptocurrency among Latin American users, accounting for 53% of their portfolio holdings, slightly above the global average. Bitcoin also represented 38% of the total crypto acquired in the second half of 2023 in the region, while stablecoins constituted 30% of the acquired crypto.

Disclaimer. The information provided is not trading advice. Cryptopolitan.com holds no liability for any investments made based on the information provided on this page. We strongly recommend independent research and/or consultation with a qualified professional before making any investment decision.

Share link:

Benson Mawira

Benson is a blockchain reporter who has delved into industry news, on-chain analysis, non-fungible tokens (NFTs), Artificial Intelligence (AI), etc.His area of expertise is the cryptocurrency markets, fundamental and technical analysis.With his insightful coverage of everything in Financial Technologies, Benson has garnered a global readership.

Most read

Loading Most Read articles...

Stay on top of crypto news, get daily updates in your inbox

Related News

Illuvium is giving out airdrops
Cryptopolitan
Subscribe to CryptoPolitan