Argentina, amidst a severe economic crisis and currency devaluation, has emerged as the foremost purchaser and holder of stablecoins in Latin America over the past six months, according to a report by Bitso, a Mexican-founded crypto exchange.
Bitso’s latest report, “Crypto Landscape in Latin America: Report 2H 2023,” explores the crypto market trends across several Latin American countries, including Colombia, Brazil, Mexico, and Argentina, all witnessing significant crypto adoption.
Argentinians are notably favoring digital dollar stablecoins over other cryptocurrencies, with 60% of crypto purchases on Bitso allocated to USD-based stablecoins like USDT and USDC. In contrast, only 13% of purchases were dedicated to Bitcoin. This trend diverges from Colombia, Brazil, and Mexico, where stablecoin purchases ranged between 31% and 40% of total crypto acquisitions.
The report highlights stablecoins as some of the “fastest-growing” cryptocurrencies in the region, comprising approximately 26% of the average user portfolio in Argentina. Bitso attributes this significant demand for stablecoins to Argentina’s economic environment, characterized by persistent inflation and currency devaluation.
Argentina, grappling with economic challenges, witnessed an alarming annual inflation rate of 211.4% in 2023, prompting citizens to seek more stable assets to safeguard their wealth. Users in Argentina swiftly convert their funds into digital dollars as a hedge against the peso’s devaluation.
Despite economic struggles, Argentina has exhibited considerable crypto adoption, ranking second in Latin America and 15th globally, according to a Chainalysis report in 2023.
In the realm of politics, Argentina saw the election of Javier Milei, a self-described “anarcho-capitalist,” as president, signaling potential shifts in economic policy. While not fully endorsing Bitcoin, Milei has expressed favorable sentiments towards the cryptocurrency, criticizing central banking as “a scam.”
Nevertheless, Bitcoin remains the preferred cryptocurrency among Latin American users, comprising 53% of their portfolio holdings, slightly above the global average. Stablecoins rank second in preference, with significant growth observed in Colombia and Argentina.
Bitso, boasting over 8 million users across Latin America, reflects the region’s growing interest in cryptocurrencies, particularly amidst economic uncertainties and currency devaluation.
