Bitcoin Embraced by Latin Americans
Why Latin America Embraces Bitcoin?
Latin America faces economical depression since the beginning of 2015 and this year, 2016, it is even worse and Venezuela economy collapses as well. Aside from political instability, collapsing of China’s stock market is said to be one of the main reason why economic depression is happening in the region. This is maybe because China is the primary partner of other nations in the region. Therefore, Latin Americans started using bitcoin as an aid to end the crises they are facing.
Last year, 2015 is the breakthrough moments for the digital currency in Latin America. It breaks records. It was reported that BitPay gained 510% from merchant transactions in the 6th month of the year but it was the end of 2015 that it marks a remarkable growth in the region. Merchant transactions recorded a 1,747% growth. Other countries figures proved the same. Bitcoin exchange trading gained 322% from Brazil while trading in Mexico grew by 600%. Bitcoin holders are very satisfied during that time of the year.
3 Reasons Why Latin America Adopted Bitcoin
Bitcoin Adoption Reason #1 – Latin American Businesses and Consumers are looking for Alternative Payment Method
There are inflation problems as well as payment problems in Latin America, thus people in the region are looking for alternatives and they find bitcoin. The problem with inflation rate will go up to 720% as IMF predicted this 2016 for Venezuela. According to IMF projections, recession with the Brazilian economy will be the longest since the year 1930-1931. Argentina’s Minister of Finance predicts that the country will experience a 25% as a minimum inflation. With all these predictions, people in the country should find ways on how to overcome this crisis. Brazilian government already announced a payment tax for sent outside of the country like remittances and tourism expenses. This is a major problem for businesses and consumers.
Bitcoin can be applied as a payment method because it is a universal currency which allowed people in the country to send money and shop internationally.
Bitcoin Adoption Reason #2 – Mobile Revolution
The main reason why bitcoin has been adopted quickly in Latin America is because of rapid internet adoption in the region and because of this the e-commerce volume in Latin America increased to almost $50 billion and this is a 24% yearly growth. The more exposed they are in global connection, the more attractive bitcoin gets as an alternative global payment method for them.
Bitcoin Adoption Reason #3 – Government Supports Bitcoin
Argentina’s newly elected President Mauricio Macri has shown support with digital currency such as bitcoin. This is very unlikely with other countries in which the governments see threat with digital currency revolution. The President was the previous Buenos Aires mayor and during his term the first Bitcoin Forum has been organized. Other countries like Venezuela and Brazilian don’t show the same respond to bitcoin but there is a big possibility that they will follow the Argentine government.
There’s no great things that comes easy. Bitcoin has its obstacles. One of those is that people are not yet ready to use the digital currency in their every day transactions.
Another one is on bitcoin buy and sell. Transferring money and exchanges outside of the region is a challenge. Exchanges in Venezuela and Argentina are limited unlike Brazil and Mexico which users have a budding foundation of exchanges.
Latin America might lead the other regions this 2016 in putting bitcoin into the mainstream.