Reports have shown that crypto adoption has been on the rise in Latin America since the middle of March as a result of the ineffective banking system.
According to the report, even though the coronavirus pandemic has limited the number of cash transactions, it has in no way affected crypto adoption and payments.
The report also noted that the majority of the transactions that were made via crypto were sent to East Asia. The research which was published by a data analysis firm, Chainalysis touched how businesses and individuals around the region have been turning to crypto as a means of payments while holding value.
Banking inefficiency a major reason for the rise in crypto adoption
In the report, it stated how the inefficiency of the banking system in the region pushed people and businesses to crypto adoption. The majority of the remittance that was done via fiat currency came into Latin America from the United States which means migrated individuals were trying to send money home to their families.
Aside from that, the relationship between Asia and Latin America has been strengthened with the number of transactions that have been carried out which is said to be worth over $1 billion.
Furthermore, the report pointed at a small part of the individuals as businessmen who were trying to buy goods from Asia and resell in their native homes.
Inflation another major reason for crypto adoption in Latin America
With this development, their level of crypto adoption has skyrocketed leaving their usually depleted fiat currency in its wake. The number of P2P transactions volume that has been carried out has been rising significantly.
As of the beginning of the first quarter, the region had the third-highest inflation rate in any region. The region had 7.1% inflation coming close behind the Middle East which boasts of 8.5% and Sub-Saharan Africa which has 8.4%. The majority of the inflation is currently being contributed by Venezuela and Argentina as a result of the inflation on the Bolivar and Peso respectively.