The financial landscape in Latin America is undergoing a significant transformation, with stablecoins emerging as a beacon of stability in a region plagued by inflation and currency devaluations. According to a recent report by Bitso, a prominent cryptocurrency exchange, the adoption of stablecoins such as Circle’s USDC and Tether’s USDT is on the rise, becoming a considerable portion of transactions. In 2024, stablecoins accounted for an astonishing 39% of total purchases on Bitso, marking a substantial increase in their usage compared to previous years.
As macroeconomic conditions continue to challenge the region, characterized by soaring inflation rates that have at times exceeded 100%, residents are increasingly turning towards cryptocurrencies as a means to preserve their purchasing power. The report indicates that stablecoins, which are pegged to traditional currencies for value stability, have become a ‘store of value’ for many users in Latin America.
USDC Takes the Lead
In this evolving market, USDC has emerged as a front-runner, capturing around 24% of purchases on Bitso. This trend comes as Bitcoin (BTC) experiences a drop in its trading volume,as its market share fell from 38% in the latter part of 2023 to just 22% in 2024. This decline may suggest that users are adopting a ‘hodl’ strategy, opting to hold onto their Bitcoin rather than making new purchases. The recent surge in Bitcoin prices, surmounting $100,000 for the first time, further reflects a shift in approach among investors.
Top 10 purchased crypto assets on Bitso by share in 2024. Source: Bitso
While Bitcoin remains popular in countries like Brazil and Mexico, where it constitutes 22% and 25% of total cryptocurrency purchases respectively, Argentina shows a staggering preference for stablecoins. USDT dominates the Argentine market, accounting for 50% of transactions, as local residents seek alternatives amid economic uncertainty.
Geographical Insights on Stablecoin Adoption
Examining geographical trends, Argentina stands out for its heavy reliance on USDT and USDC due to rampant inflation. In 2024, USDT purchases in Argentina reached 50%, while USDC accounted for 22%, showcasing a clear pivot towards stablecoin adoption as a hedge against economic volatility.
In contrast, the need for Bitcoin appears to wane within Argentina, where only 8% of cryptocurrency purchases involved BTC, the lowest share among the analyzed countries in the region. This is indicative of the specific economic challenges in Argentina, which have compelled users to prioritize stability over the potentially greater, but more volatile, returns of Bitcoin.
The insights from Bitso provide a compelling look into how cryptocurrencies are reshaping financial behaviors in Latin America. As more individuals seek ways to safeguard their wealth, the steady adoption of stablecoins and their rising significance as a ‘store of value’ serve to highlight the potential for cryptocurrencies to play a vital role in the region’s economic future.
