Blockchain technology and cryptocurrencies have been growing rapidly and massively in practically all corners of the world, and the Latin American region is no exception.
Cryptocurrencies, also known as digital currencies, have seen a large increase in institutional participation and mass adoption, due to the characteristics of transparency, deflation and low transaction costs. According to the study published during 2020 by Statista, one of the main statistics digital portals, the Latin American region has the largest number of cryptocurrency users in the world.
Despite the risk, uncertainty and volatility that such aggressive technological innovation brings with it, cryptocurrencies have become a lifeguard for the episodes of financial chaos that Latin America has been experiencing in the last decade. Here we can cite the Argentine case, where inflation increased by more than 50% during 2019 or Venezuela, where inflation is overwhelming. According to the International Monetary Fund (IMF), Venezuela is in a hyperinflation scenario that could reach 5500% in 2021, which makes it the country with the highest inflation in the world.
These scenarios of economic despair accelerate the search for alternatives to paper money and that is why digital assets are gaining more relevance every day as a tool to carry out transactions.
How are cryptocurrencies being perceived?
If we want to go into detail about why the adoption of cryptocurrencies has been increasing, we must bear in mind that, in addition to its use as a way of payment, cryptocurrencies are seen as a savings method, in many cases perceived as a storage of value, title that until now was exclusive to refer to gold or silver, precious metals that can have value and protect us in the long term from the loss of purchasing power of paper money. In this case, Bitcoin comes into play, which is popularly considered a storage of value, and for this reason it is affirmed that Bitcoin is digital gold.
The other fundamental element is the perception of cryptocurrencies as an investment method. So far, more than 10,000 types of digital currencies have been created, which are supported by blockchain technology and aim to solve a problem in the real world. In this way, a large mass of Latin Americans is speculating with Bitcoin and other cryptocurrencies, accumulating fractions of these assets and expecting them to increase in price in the coming years and hence take benefits.
On the other hand, in the Latin American region the regulation of cryptocurrencies is weak, there are no restrictive measures for the possession of these digital assets.
The same way, it is not possible to monitor its use for tax purposes. As of today, we could affirm that in most cases, there is a legal vacuum for the use of cryptocurrencies. For example, there are no processes for filing taxes on profits generated in this market. Among the Latin countries with the greatest acceptance of this technology, we can mention Mexico, Venezuela and Argentina, while the countries or governments with the most rejection we can highlight Bolivia and Ecuador.
Adoption will continue to gain momentum
During 2021 the number of companies in the United States and Europe that participate in this market continues to grow. We can highlight technology companies, investment funds or large banks. Undoubtedly, this has aroused interest in the Latin American region and soon we will see latin companies and banks taking a position, as a value accumulation strategy and offering cryptocurrency financial services to bank customers.
Although the cryptocurrency market suffered a price slump during the month of May, the general public expects it to pick up again in the last months of the year. Therefore, the phenomenon of speculation with cryptocurrencies has been increasing.
One of the most frequent questions or doubts that new users have is how they can then spend the money they have in cryptocurrencies. And the truth is that more and more companies accept Bitcoin or Ethereum as a way of payment.
One way that I have found to use my cryptocurrencies to later receive benefits is through Crowdgrowing, and this new concept has seemed fascinating to me. Being able to buy cannabis plants and after a while sell the harvest in a safe and transparent way. Both the purchase and the earnings can be made with cryptocurrencies through JuicyFields. This model is also gaining relevance in Latin America. Juicyfields was participating in the Cannabis Expo Mexico event held in the azteca country during the month of June, where this Crowdgrowing model was revealed a little more in detail.
