Crypto Brands Improve Financial Structure and Quality of Life in South America

Much of South America has struggled with financial crises in recent years. Between unemployment and inflation, still fueled by the COVID-19 pandemic, users in most South American countries have realized that cryptocurrencies are a viable alternative to their national currencies. Not only does crypto provide the unbanked and “not-so-elitist” population with access to financial tools, it also provides a faster, safer, and more efficient alternative to remittances.

Earlier in 2021, Statista published a study based on responses from 2020 that identified Latin America as one of the regions in the world with the highest concentration of cryptocurrency users per capita. Brazil, Mexico, Chile, Argentina and Colombia ranked among the top 15 countries with the most crypto users.

With an influx of crypto-based brands and platforms, the traditional financial structure of these third world countries is about to change dramatically, paving the way for democratized finance and equal opportunities for the unbanked population. and underserved.

Crypto Brands Accelerate Rise of Shadow Economies

According to the World Bank, nearly 50% of the Latin American population does not have access to basic banking services. However, the number of crypto brands in South America has grown significantly over the past two years, providing users with a profitable alternative.

Take, for example, Crypto.com, which has made its mark in almost every country in South America, most notably Brazil. Crypto.com has made it possible for locals to use crypto as a more common payment method in several mainstream businesses by offering its full range of products and services. In addition, Crypto.com also offers its encrypted debit card, allowing crypto owners to finally pay for goods and services using crypto.

The dramatic increase in crypto adoption in South American countries is due to several factors, namely the challenges associated with sending and receiving funds. According to recent reports, remittances to Latin America increased by 6.5%. However, the average costs of sending USD through trust fund transfer platforms have remained high over the same period.

Skrill, one of the leading fiat and crypto platforms, addresses the challenges associated with remittances. Skrill is extremely popular in South America as a payment platform due to its affordability and speed of transaction execution.

The platform recently integrated crypto services alongside its existing fiduciary services, providing migrant workers with a simple and inexpensive channel to send money home to families and friends. Amid the volatility and inflation inherent in local currencies, Skrill has established itself as a destination of choice for South American users.

Salvadoran President Nayib Bukele’s recent announcement confirming that Bitcoin will be accepted as legal tender is not only a vote of confidence for the crypto ecosystem, but has also sparked interest from neighboring countries in Latin America. With El Salvador’s decision that Bitcoin is legal tender, locals will need access to more crypto-based financial solutions.

However, Bitcoin has limited use in the real world. This is where an innovative smart contract solution, RSK, adds value to the Bitcoin network, providing the much needed solution to help accelerate the adoption of Bitcoin in the South American region. In response to the growing number of Bitcoin hodlers in El Salvador and neighboring countries, RSK has introduced its side chain which can interact with layer 1 chains like Ethereum and Bitcoin.

The smart contract platform also hosts DeFi apps like Sovryn, allowing users to lend, borrow, trade, and earn interest on the BTC they hold. Providing users with a way to generate passive income from BTC allows users to increase their net worth, particularly in El Salvador, where Bitcoin is now legal tender.

Favorable cryptocurrency regulations, limited access to financial services, and the constant threat of inflation in South American countries are contributing to the increased acceptance and adoption of cryptocurrencies. As more crypto brands enter the market, the existing South American financial ecosystem will benefit immensely from the competition it brings, ushering in a higher degree of financial inclusiveness, more rules of the game. equitable and an effective solution for unbanked populations.


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Marianne R. Winn

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