Fintech firms in Latin America are rapidly embracing digital finance solutions, driven by the increasing adoption of cryptocurrencies among citizens. According to a recent report by USDC issuer Circle, citizens of Latin American countries received a total of $562 billion in digital currency value between 2021 and 2022. Stablecoins have played a major role in this trend, becoming an integral part of the purchasing power of Latin American consumers.
The Rise of Stablecoins in Latin America
The global settlement volume of stablecoins reached $7 trillion last year, which is half of the $14 trillion settled by Visa and Mastercard. This highlights a significant pivot towards stablecoins in Latin America, where they are now being used for everyday purchases. A Mastercard survey conducted last year also revealed that over half of Latin American consumers have already engaged in crypto transactions.
The widespread adoption of cryptocurrencies in Latin America can be attributed to several factors. Firstly, the region has a large underbanked population, which lacks access to traditional financial services. Cryptocurrencies provide an alternative avenue for financial inclusion and empowerment. Additionally, lower income inequality in Latin America has contributed to the higher adoption of fintech solutions. Circle, in its report, highlights that “LatAm is taking on a leading role when it comes to digital currency and financial technology more broadly.”
“This is partly due to necessity, since many populations within the region lack access to analog financial services,”
The report also emphasizes the strong developer base in Latin America, which has been a major driving force behind the rapid embrace of digital currencies. Circle draws parallels between the evolution of digital assets and the internet boom in the 1990s. The company predicts that “trillions of dollars in value will eventually migrate to blockchain-based financial services” in the coming years. Traditional financial instruments will be migrated to the blockchain, opening up access to a significant population that has historically been excluded from such services.
