Latin America, the American region south of the United States, the continent between 32 ° 42 ‘N and 56 ° 54’ S, including Central America, the West Indies, and South America. There are 33 countries and several dependent regions in Latin America, including Mexico, Cuba, Brazil, Argentina and Suriname. Cryptocurrencies are popular and deeply integrate the economic lifeline of the whole country. El Salvador, which has a strong preference for Bitcoin, is also a member of Latin America. El Salvador has declared Bitcoin as the national legal currency and has repeatedly used the national reserve Bitcoin to purchase it.
On October 20, Chainalysis, a blockchain analyst, released the Cryptocurrency Geography Report 2022. In terms of cryptocurrency adoption, Brazil and Argentina in Latin America ranked seventh and thirteenth respectively. Coincidentally, another member of Latin America recently, Dominica Coin, an island country located in the northeast of the Windward Islands in the East Caribbean Sea, with a land area of 7.51 million square kilometers and a population of less than 100000, announced that the Wave Field TRON Agreement had become the “national public chain” of the country, and authorized Wave Field TRON to issue its own cryptocurrency, Dominica Coin (DMC).
The country has also granted legal tender rights to some cryptocurrencies, allowing the exchange rate between these cryptocurrencies and the Eastern Caribbean Dollar (XCD) to be freely determined by the market, and the transaction process is exempt from capital gains tax. Cryptocurrencies confirmed in this legislation include TRX, BTT, JST, NFT, USDD (TRC-20), USDT (TRC-20) and TUSD (TRC-20).
This is the highest level of cooperation between the blockchain industry and sovereign countries so far in the country with the most radical attitude towards cryptocurrencies, following El Salvador. Prime Minister Roosevelt Skerrit of Dominica said that “the openness and efficient cost of wave field TRON blockchain infrastructure will play a vital role in better integrating small island developing countries such as Dominica into the global economy in the future”.
These phenomena are not excluded from the positive results of cryptocurrency or cryptocurrency related platforms and considerable attention to the region. It also reflects that for these island countries, it is too difficult and fragile to develop blockchain and cryptocurrency only by their own strength. Choosing a mature cryptocurrency or a top public chain cooperation with strong strength is the best way for small and medium-sized countries to embrace blockchain and cryptocurrency.
The market came into being just under demand
The adoption rate of cryptocurrency in Latin America is very high. In addition to El Salvador and Dominique above, in the border areas of Colombia and Venezuela, people are using cryptocurrency to exchange food and other necessities, which is more effective and safe than their original bundles of overprinted and inflationary coins. Therefore, there are many Bitcoin ATM machines distributed in these areas, The number even exceeds that of local banks. The research report also shows that the penetration rate of cryptocurrency owners in Latin America is the highest.
Looking for more effective currency under high inflation. According to the research and analysis of Johnson School of Business of Cornell University, many Latin American countries have been fighting against high inflation for a long time, including Venezuela and Argentina. In 2021, inflation will also accelerate in other Latin American countries, including Brazil, Chile, Colombia, Mexico and Peru. This led to fluctuations and weakness in the local currency, and many residents chose to store their wealth in assets such as gold and dollars.
This transformation also makes people in these countries more willing to use Bitcoin as a means of storing assets. At the same time, the political situation in the region is volatile, and the residents should make efforts to cope with long-term political instability. Because of this, many residents prefer to store part of their wealth in anti censorship assets that are more difficult for the authorities to seize and control.
Take El Salvador as an example. About 70% of the people in this region do not have bank accounts or credit cards. The economy relies heavily on migrant remittances, which account for more than 20% of El Salvador’s gross domestic product. These international transfers depend on the financial institution services of the third-party manufacturers and must be audited by the Bank for International Settlements. The high commission cost and time cost make Bitcoin possible to become the legal tender in El Salvador.
These various reasons have given cryptocurrency a good growth environment in Latin America. The global crypto ecology is still in a relatively early stage, not to mention the same in Latin America. Opportunities and crises coexist in the crypto ecology. While enjoying the prosperity and development brought by cryptocurrency or its partners, The crisis that other countries try to avoid is like opening Pandora’s magic box to the weak economic system and poor public security environment in Latin America, which has a profound and invisible impact.
Author:BticoinKOL,Source:https://bitcoinkol.com/archives/2807
