Originally published on: October 10, 2024
Argentina has emerged as a leader in the Latin American cryptocurrency market, surpassing Brazil in terms of estimated crypto inflows by users, according to a recent report from Chainalysis.
Between July 2023 and June 2024, crypto users in Argentina deposited a total of $91 billion in crypto, making it the top Latin American country in terms of crypto inflows during that period. This marked a significant milestone as Argentina edged out Brazil, which received an estimated $90 billion in crypto value during the same timeframe.
The surge in crypto adoption in Argentina can be attributed to the country’s prolonged battle with inflation and local currency devaluation. As a result, many Argentinians are turning to alternative ways of saving, including using stablecoins pegged to the US dollar.
Chainalysis noted that Argentina’s stablecoin market is among the largest in the world in terms of stablecoin transactions, with a share of 61.8% of retail-sized transactions under $10,000. This indicates a growing reliance on stablecoins to safeguard finances from inflation and currency instability.
Tether, the issuer of the world’s largest US dollar-pegged stablecoin, has taken notice of Argentina’s demand for digital currencies. Tether CEO Paolo Ardoino acknowledged the need for a “digital dollar” in a country where people increasingly prefer holding their dollars in digital form for convenience.
Argentina’s favorable stance towards cryptocurrencies was further solidified when the country officially allowed the use of Bitcoin in legally binding contracts in late 2023, under the leadership of pro-Bitcoin President Javier Milei.
Despite Argentina’s progressive approach to crypto adoption, the government has yet to regulate the growing market fully. While developed economies like those in Europe have introduced stablecoin regulations, Argentina is still working towards establishing a stablecoin framework to govern its crypto market.
As Argentina continues to embrace cryptocurrencies, its position as a crypto-friendly nation is likely to attract more investors and fuel further growth in the digital asset space. Subscribe to the Markets Outlook newsletter for more insights on investment opportunities and trading strategies.
