Fintech firms in Latin America are rapidly adopting digital finance solutions, driven by increased crypto adoption among citizens. According to a report by USDC issuer Circle, citizens in Latin American countries received $562 billion in digital currency value between 2021 and 2022. Stablecoins, in particular, have played a significant role in entering the purchasing power of Latin American consumers.
The global settlement volume of stablecoins reached $7 trillion last year, half of the $14 trillion settled by Visa and Mastercard. This indicates a growing preference for stablecoins in Latin America, where they are being utilized for everyday purchases.
The report highlighted that Latin America’s well-established market demand, policy support, and widespread usage of the dollar make the region a natural fit for broader stablecoin adoption. Additionally, a Mastercard survey from last year indicated that over half of Latin American consumers have already engaged in crypto transactions. This underscores the increasing acceptance and use of digital currencies in the region.
What Drives the Adoption in LatAm?
The rapid adoption of cryptocurrencies in Latin America is fueled by a large underbanked population with limited access to traditional financial services. Additionally, lower income inequality in the region is contributing to higher adoption of fintech solutions.
Latin America is taking a leading role in digital currency and financial technology, driven partly by necessity, as many populations within the region lack access to traditional financial services, according to Circle’s report. The strong developer base in Latin America is also identified as a major factor in the region’s rapid embrace of digital currencies. This combination of factors positions Latin America as a key player in the ongoing evolution of digital finance.
Circle draws striking parallels between the evolution of digital assets and the internet’s development in the 1990s. According to the USDC issuer, digital currency and blockchains are progressing beyond the “dial-up phase,” with an improving user experience and faster, cleaner, and more resilient blockchains.
The blockchain firm predicts that “trillions of dollars in value will eventually migrate to blockchain-based financial services” in the coming years. It anticipates a shift of more traditional financial instruments onto the blockchain, exposing them to significant populations that have traditionally lacked access to such services. This suggests a transformative potential for blockchain technology in providing financial services and access to a broader demographic.
