According to Chainalysis, a crypto auditing and blockchain tracking firm, the use of dollar-pegged stablecoins is growing in Latam, specifically in Argentina and Venezuela, due to the common economic problems that both countries are facing. 34% of the “small” transactions include stablecoins in Venezuela, and 31% of these in Argentina, as citizens seek to shield themselves from devaluation and inflation.
Chainalysis Report Finds Stablecoins Are Useful for Latam Countries
While criticized by many, stablecoins are becoming a significant part of the activity of the cryptocurrency market in some countries. The latest report from Chainalysis, a cryptocurrency research, and blockchain surveillance firm, has revealed that a significant part of the transactions in Argentina and Venezuela include stablecoins.
The report, which puts the spotlight on the usage of cryptocurrency in these countries, determined that 34% of the small transactions, moving less than $1,000, include stablecoins in Venezuela. In the same way, 31% of these transactions move stablecoins in Argentina.
The difference in the usage patron when comparing Latam to other regions has to do with the economic particularities that countries like Argentina and Venezuela, facing record levels of inflation and devaluation of their fiat currencies, present.
Sebastian Serrano, CEO of Ripio, an Argentina-based cryptocurrency exchange, believes that stablecoins are popular because offer a digital hedge in dollars. He explained:
Psychologically, Argentinians are using crypto for safety.That’s why you see so much use of stablecoins — because it’s a good digital alternative to storing physical dollars.
Circumstances and Restrictions
While Venezuelans already shed their exchange control, Argentinians are still under restrictions from buying dollars. Also, there are different exchange rates for different dollar purposes in Argentina. Recently, the government introduced two new exchange rates, called Qatar and Coldplay, due to their specific applications. This makes the stablecoin proposal more interesting, allowing citizens to sidestep these controls by using these digital dollars.
However, not only Argentina and Venezuela are relying on stablecoins to move value. Brazil, one of the biggest economies in the continent, is also registering a high level of usage of stablecoins. According to numbers presented by the Brazilian Tax Authority corresponding to August, two stablecoins,
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