Posted 1 year ago | by Ben Armstrong

Troubles With Bank Transactions Push Latin Americans to Use Cryptocurrency

The influence of cryptocurrency has been limited in many places in Latin America. The impact of COVID-19 have changed this – and many are turning to cryptos as a means of savings and payment.

Blockchain research from Chainalysis showed that a number of Latin American businesses are embracing cryptocurrency for purchases.

The instability of fiat markets fuels crypto adoption. Banking transactions have been out of control in Latin America during the coronavirus pandemic, and nations are dealing with unstable monetary conditions.

As a result, many people switched to cryptocurrency as a means for trading, storing value and property investment, leading to the growth of overall crypto use.

A New Kind of Latin American Currency Crisis

Historically, the majority of transfers to Latin America in fiat money are from the US. The source of this money are mostly migrant workers who send the money to families.

Speaking with Chainalysis, Luis Pomata, the co-founder of Paraguay-based exchange Cripex said that cryptocurrency facilitates business to bypass expensive wire transfers and the import fees charged by regional banks.

Citizens of many Latin American nations are seeking cryptocurrency solutions to deal with ineffective traditional banks. Additionally, many nations like Argentina and Venezuela have problems with inflation, which makes cryptos an attractive form of savings.

New Ways to do Business

SatoshiTango, Chilean Exchange Manager, Sebastian Villanueva, noted that a number of Latin Americans with gig economy jobs also have a turned to cryptocurrency, as digital asset helps simplify the transfer process compared to the banking sector – which is slow and expensive.

Statista estimates that the third highest inflation rate in any region in 2019 (7.1%) just behind the Middle East (8.5%) and Sub-Saharan Africa (8.4%) is in Latin America. The research gives an insight on a slow-growth region which accelerates its use of cryptocurrency mainly for the build-up of wealth and trade.

No End in Sight

As the monetary problems in Latin America become more acute, it is likely that many more people will use cryptos for a variety of reasons. Local banks are unlikely to change their ways, and will face an existential crisis in the coming years.

Cryptos allow people in areas that are poorly managed to escape from the established banking and monetary system, and do business as normal at much higher speeds – without an inept government ruining what little economy exists in its failing state.

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About Ben Armstrong

ef4f73e9ddeb61becab57469962fa946?s=90&d=blank&r=g Banking System Woes Push Latin Americans to Use CryptocurrencyBen Armstrong is a YouTuber, podcaster, crypto enthusiast, & creator of BitBoyCrypto.com. Better known as BitBoy Crypto, he works hard to educate and inform the crypto community.

Ben has been involved with the world of cryptocurrency since 2012 when he first invested in Bitcoin. He used Charlie Shrem's BitInstant & lost Bitcoin in the Mt. Gox hack.

In 2018, Ben decided to go "full-time crypto" and focus all of his time and energy into expanding the reach of crypto.

If you have any questions or comments please feel free to email him at BitBoy@BitBoyCrypto.com or contact him on Twitter @BitBoy_Crypto.