The Mexican-founded cryptocurrency exchange Bitso said that, over the last six months, Argentina—a country reeling from a severe economic crisis and a falling peso—has been Latin America’s top buyer and holder of stablecoins.
‘Crypto Landscape in Latin America: Report 2H 2023,’ released not long ago by Bitso, explores the trends influencing the cryptocurrency sector in a number of Latin American nations—including Mexico, Argentina, Brazil, and Colombia—that have seen significant crypto adoption.
Despite market instability and local economic issues, the region’s people have shown increased acceptance of cryptocurrencies, leading to a substantial adoption of cryptocurrencies during 2022 and 2023. Among South American countries, Argentina is unique in having a digital dollar acquisition rate that is over five times higher than other cryptocurrencies.
Despite the economic uncertainty, the research shows that 60% of Bitso purchases in Argentina went toward dollar-based stablecoins like USDT and USDC, while Bitcoin only received 13% of the total. The percentage of total cryptocurrency purchases that were stablecoins varied between 31 and 40 percent in Mexico, Brazil, and Colombia.
Among the “fastest-growing” cryptocurrencies in the region, three stablecoins stood out. Bitso found that, mainly due to the country’s economic climate, stablecoins make up about 26% of the typical Argentine user’s portfolio. Bitso says that the current political and economic climate in Argentina is to blame for the country’s high demand for stablecoins, as people there are looking for alternatives to traditional funds and inflation.
Argentina, the third-largest economy in South America and the second-largest nation in the region, has struggled economically for a long time. Inflation reached a worrying 211.4% in 2023, adding fuel to the fire of worries about the country’s financial stability. Consumers are highly motivated to seek out more secure solutions in order to protect their funds from potential devaluation due to economic volatility.
The persistent depreciation of the peso in Argentina has customers quickly turning their money into digital currency. Chainalysis research from 2023 found that despite Argentina’s financial difficulties, the country ranked second in Latin America and fifteenth overall for crypto adoption.
The recent election of Javier Milei, a self-proclaimed “anarcho-capitalist,” as president of the country may indicate a shift in economic strategy. Although Milei does not completely support Bitcoin, she does have positive feelings about it. She has called it “the return of money to its original originator, the private sector.”
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