Cryptocurrencies in Argentina: transfers reached US$93 billion

Transfers with cryptocurrencies in Argentina reached US$93 billion between July 2021 and June 2022, a record that places the country as the second most active after Brazil in the region, driven by the strong adoption of stablecoins as a refuge of value and use in everyday payment transactions.

In that sense, despite having a much smaller population than Brazil (215 million inhabitants against 45 million), the volume of money in cryptocurrency transfers in Argentina was two-thirds of that traded in the neighboring country in the same period, with just over US$140 billion.

Argentina is currently in 13th place in the Global Cryptocurrency Adoption Index 2022 conducted by Chainalysis, based on cross-referenced data of settled transfers in the leading public blockchains and their georeferencing through the Internet, which identifies relevant activity with cryptocurrencies in 142 countries.

Although there are no official figures, since there is no single user registry and the same person can open accounts on multiple platforms, several surveys and usage surveys indicate that at least 1 out of every 10 Argentine adults buys or buys cryptocurrencies at some time, so it is estimated that about 2.5 million people operate cryptocurrencies in Argentina.

The paradox of the adoption of cryptocurrencies in Latin America occurs despite the collapse in their price -the market’s total value went from US$3 trillion in November 2021 to piercing US$800 billion in June 2022.

It is one of the few regions in the world where the volume of operations grew in the last year, given the greater adoption of users not for speculation but for inflation protection.

The report states that between July 2021 and June 2022, the region received US$562 billion in cryptocurrencies, 40% more than the same period last year, a much higher percentage than the rest of the world, where even the level of cryptocurrency use fell back, especially in Eastern Europe and Asia.

In other words, more and more users are opting to safeguard their savings through the crypto world, given the ease and speed with which they can operate, getting hold of the so-called stablecoins or stable cryptocurrencies, which mostly follow the value of the dollar (USDC, USDT, and DAI are the best known).

“Chainalysis data validate the two main conclusions that we have been mapping with AMI in the region:

“First, that economies where the local currency is fragile adoption flourishes, Venezuela and Argentina are the main cases; and second, that economies with good regulatory support also bite the bullet, such as Brazil,” Ignacio Carballo, teacher, researcher, and consultant of “crypto and alternative finance” at American Market Intelligence (AMI), explained to Télam.

Another characteristic of the Argentine phenomenon is that, unlike the region and even the world, three out of every four operations (75.3%) are carried out through centralized exchanges:

Companies that offer a platform through which users buy and sell cryptocurrencies but not between peers, but through the company itself, while in the world, the average reaches two out of every three operations (66.3%).

Today, over a dozen Argentina companies provide this service (Ripio, Lemon, Buenbit, Belo, Let’s Bit, Satoshi Tango, Argen BTC, and Decrypto, among others), to which international companies are also added.

OTHER RELEVANT DATA

Among the relevant data in the report is that, in Argentina, more than 31% of retail crypto transactions come from the sale of stablecoins, compared to only 26% in Brazil and 18% in Mexico.

“Stablecoins will be the growth vehicle for crypto in the region. There is no attraction to crypto or technology but a quest for financial survival, that savings don’t disappear to protect against inflation.

“The same is true in Africa, where it is increasingly being adopted as an everyday use,” said Dan Cartolin, account executive for North and Latin America at Chainalysis.

For Juan José Méndez, CBO of the Argentine exchange Ripio, in the current context of a bear market, “although Bitcoin or Ethereum is still in high demand on our platforms, stablecoins or “cryptocurrencies” gained a lot of ground this year”.

With information from Ámbito