Sherlock Communications posted a Blockchain Report in Latin America 2021, which highlights the updates to the regulation and adoption of the blockchain ecosystem in Argentina, Brazil, Colombia, Costa Rica, Chile, The Savior, Mexico and Venezuela. According to the findings, which were shared with Cointelegraph en Español,
El Salvador became the first Latin American country to adopt Bitcoin as the official currency, as of September 7, 2021, a movement that is gaining interest throughout Latin America.
The results of the cited report are part of an exclusive survey of 2,200 people in the 8 countries to understand their attitudes towards cryptocurrencies.
Prosperous soil for Blockchain
The report found that opinions were mixed among people in El Salvador. 29% of those surveyed indicated they disagree with the move towards cryptocurrency, of which 21% said they “strongly disagree.” This contrasts with the 29% who are in favor of the measure, a figure that contains 17% who “fully agreed.” In addition, 42% maintain a neutral opinion on the new financial measures.
Brazilians were the biggest supporters of official recognition of cryptocurrency in El Salvador, with 56% in favor and 48% saying they want Brazil to adopt it as well. In Colombia, 52% said they agree with the measure in El Salvador, as well as 51% in Mexico and 45% in Argentina.
But generally speaking, according to latin americans, the main impact of the development of cryptocurrency markets will be to facilitate international money exchanges, an impact cited by 34% of people in the region. The rapprochement of world economies was also a scenario cited by 32% of Brazilians for the future of cryptocurrencies. Furthermore, Latin Americans are less concerned about the risks of cybercrime and fraud related to cryptocurrencies in 2021 than they were a year ago. In 2020, 24% of the region cited this as a possible impact, but a year later, 20% of respondents cited the same.
Luiz Haddad, Blockchain Consultant at Sherlock Communications, said: “The blockchain and cryptocurrency market continues to grow in Latin America, and I believe this trend will continue in the coming years. The El Salvador experiment will serve as a great reference for Latin American countries on how to incorporate blockchain and cryptocurrencies in their economies and generate well-being for their citizens ”.
Why do Latin Americans invest in cryptocurrencies?
Interest in cryptocurrencies in the main markets of Argentina, Brazil, Colombia, Mexico and Chile is increasing due to international uncertainty. Three in four of those surveyed agree that economic downturns related to the pandemic are likely to affect their interest.
According to the report, Investment diversification is the number one reason why Latin Americans invest in cryptocurrencies. When asked to select the top reasons to invest in cryptocurrencies, 44% of all respondents chose this answer. This was particularly important in Brazil (55%), Colombia (47%) and Mexico (45%).
Argentine (58%) and Mexican (47%) respondents were more likely to invest in cryptocurrencies to ‘protect assets from inflation and financial instability’. However, this was only the second highest motivating factor in 2021, falling 12% overall among the five countries surveyed, after being the top reason cited in 2020.
The results of the report also show that the economic crisis triggered by the coronavirus pandemic, especially strong in Latin countries, has driven the search for investment alternatives and cryptocurrencies stand out here. As regulation matures around the world, Latin America is proving to be a prosperous ground for blockchain development.
Patrick O’Neill, Managing Partner at Sherlock Communications, commented: “This report provides an interesting picture of Latin American economies as the adoption of cryptocurrency as a legitimate investment option accelerates.”
Why are some Latin Americans (still) not using cryptocurrencies?
Despite economic uncertainty and inflation concerns, Argentines were also the only country that saw the rejection of cryptocurrencies become more common, indicating a polarization of public opinion.
In 2020, 12% declared that they would not invest in digital money systems, while this year the proportion had grown to 28% of the population. This was not reflected in neighboring countries, where rejection rates decreased. Three out of ten Brazilians said they would not make such an investment in 2020, while in this year’s survey only 12% said the same. In Colombia, one in four was not interested last year and now only 7% express such indifference.
Building trust
Better reading and understanding of digital currencies was found to be the most important factor in increasing the consideration of cryptocurrencies in all five markets (41-48%), while having easy-to-use platforms that do not require specialist knowledge was the second (36 -40%).
29% of Latin Americans said they want adequate regulation of cryptocurrency markets, compared to 26% last year. This was more worrisome in Mexico, where 34% cited this factor in 2021, compared to 24% in 2020. In Colombia, 32% did the same, as well as 28% in Chile, 27% in Brazil and 24 % of Argentines.
Other key findings
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Bitcoin is ahead of other cryptocurrencies in terms of public recognition, with between 74% (Chile) and 92% (Argentina) of the respondents familiar with the currency. This is followed Ethereum (18-41% recognition), Litecoin (17-30%) and Dogecoin (11-16%).
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Economic inequality is a factor, with 25-44% of respondents suggesting that not having the money to invest was one of the main reasons they used cryptocurrencies.
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International money exchange was predicted to be the main global benefit of cryptocurrency, as highlighted by respondents (31-42%).
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