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.
