Top 5 Latin American countries for crypto adoption in 2024

Cryptocurrency and its associated technologies are on the rise in Latin America (LATAM), driven by a variety of nation-specific social and economic factors. The region is rife with opportunities for the technology, fueled by inflationary pressure, the devaluation of local currencies, and a strong entrepreneurial mindset among many. Most significantly, we see undeniable real-world examples of how cryptocurrencies can bring about financial inclusion and rewrite the traditional financial system. Industry players have taken note of the same.

According to a study from the Inter-American Development Bank, cryptoasset firms operating in Latin America and the Carribean doubled between 2016 and 2022. More than 170 crypto asset firms were serving the region in 2022, with almost 100 headquartered or incorporated in Latin America and the Caribbean.

As the industry moves through 2024 with optimism for a prolonged bull market buoyed by various tailwinds, now's the time to reflect on jurisdictions that are contributing to crypto's mainstream emergence.

Read on as we explore the five leading countries in Latin America for crypto adoption, in no particular order.

Brazil

A rapidly changing market with the largest GDP and consumer market in South America, Brazil's evolution includes a strong adoption of blockchain technology and cryptocurrencies. The nation sits ninth in Chainalysis' 2023 Global Crypto Adoption Index — the highest of all countries in Latin America. Such strong positivity towards crypto and the enthusiasm of Brazil's population to embrace the technology led us to bring our exchange and Web3 wallet to the country during late 2023.

What's driving Brazil's crypto growth?

Many consider Brazil to be among the frontrunners for crypto adoption, and the nation has taken positive steps to create a crypto-fertile environment. December 2022 saw the announcement of law 14,478 that requires all virtual asset service providers (VASPs) operating in Brazil to gain authorization from a federal public administration entity. Meanwhile, in May 2023, Brazil's Central Bank announced 14 participants, including Microsoft and Visa, for a trial of the digital real — a central bank digital currency (CBDC).

Supporting the push towards greater crypto adoption are specific socioeconomic factors that many believe crypto can help address. Specifically, 34 million people in Brazil remain unbanked, while according to 2019 data, around 1% of Brazil's wealthiest receive 28.3% of the nation's income.

Chainalysis data shows that, between July 2022 and June 2023, retail and professional-driven transaction volumes hovered around the $2 billion mark, including a peak of around $3 billion in November 2022. Meanwhile, between October 2022 and October 2023, demand for Bitcoin was higher among Brazilian traders than their Argentinian counterparts, spotlighting a commitment to digital assets even through a major market downturn.

Opportunities and challenges ahead

The resilience shown by Brazilian traders in the face of the most recent bear market underscores their enthusiasm for crypto and genuine belief in the utility of digital assets. Meanwhile, mainstream knowledge of crypto is relatively high. According to a survey from Consensys and YouGov, 59% of Brazilian respondents stated they understand what cryptocurrencies are. Meanwhile, around one in five people in Brazil own cryptocurrency today. Among those who have heard of the technology, 46% stated they'd "probably" or "definitely" invest in cryptocurrency over the coming 12 months.

However, Brazil faces common hurdles to crypto's continued adoption. The regulatory framework is still taking shape, while price volatility could be a deterrent to many traders and technology adopters. Additionally, the country does have robust banking and FinTech infrastructure, which presents strong competition to emerging blockchain-based solutions looking to enter the market and capture users.

Argentina

Alongside Brazil, Argentina is grabbing a large share of the widening crypto spotlight. Recently, the nation's political shifts have been a catalyst for change. In mid-2022, Argentina's central bank, BCRA, announced restrictions on the ability of banks to provide crypto services. By December 2023, the country's new leadership had approved Bitcoin as Argentina's official currency, ratifying its use for official contracts.

Many would argue that such a contrasting shift in policy accelerated the growth of a movement that was already gathering pace. Economic challenges coupled with a supportive government have created fertile ground for crypto's continued adoption in Argentina.

What's driving Argentina's crypto growth?

Double-digit inflation and a tumbling peso have led many Argentinians to move their funds into cryptocurrencies. In fact, the nation witnessed an eye-watering annual inflation of 211.4% in 2023. Meanwhile, in late 2023, the government announced it'd devalue the peso by more than 50% as part of emergency economic reforms. Such drastic steps are being taken to help heal Argentina's ailing economy, but rather than wait it out, crypto has become an attractive financial tool for many. Evidence is found in the sentiment of Argentinians towards crypto.

A 2022 survey from Morning Consult found that around 60% of respondents in Argentina stated they had "a lot" or "some" belief that Bitcoin and other cryptocurrencies would perform well in one to two years. What's more, the country led Latin America for raw crypto transaction volume in the year to July 2023, with approximately $85.4 billion in value received, according to Chainalysis. The data also shows that more than one-third (31%) of this figure relates to retail-sized stablecoin transactions, underlining the nation's flight to more resilient assets.

Opportunities and challenges ahead

Argentina's favorable crypto policies deserve to be seen as a major opportunity for further adoption. In 2024, the government is reportedly preparing to regulate cryptocurrency service providers in a move that would keep Argentina off the Financial Action Task Force (FATF) gray list. Such regulations won't only help protect platform users, but also attract more players in the global crypto space to offer their services.

As competition usually breeds innovation, Argentinians could enjoy a flourishing crypto market defined by high degrees of liquidity, security, and utility. Towards this end, we entered the market in February 2024 with the launch of our class-leading exchange, Web3 Wallet, and peer-to-peer trading services.

Might crypto's volatility create a ceiling for further adoption? It's understandable that many in Argentina could be reluctant to move their money into crypto, seeing it as another unpredictable asset class in competition with the more established options of US dollars and gold.

Colombia

Colombia's crypto story reflects much of the wider region: a large remittance market that's turning to pegged stablecoins, high currency devaluation causing a move to new stores of wealth, and a crypto-friendly government. As a result, the nation ranks 32 in Chainalysis' 2023 Global Crypto Adoption Index.

With 74% of Colombia's total crypto activities coming through centralized exchanges, according to Chainalysis, the country's population appears trusting of the infrastructure available to them and eager to trade stablecoins and assets with a higher market cap.

What's driving Colombia's crypto growth?

Similar to Mexico, Colombia's remittance inflows have spurred adoption for crypto and accelerated the arrival of related infrastructure. Remittances in Colombia reached $914.21 million in December 2023, according to Trading Economics. That followed the arrival of a Colombian peso stablecoin on the Polygon network in August 2023 to give people and institutions the option to transfer, pay, earn, and save money via blockchain rails.

Complicating the situation for Colombians is the volatility of the peso. The currency dropped significantly in 2022 due to uncertainty over President Petro's reform agenda. Soon after, the peso recovered and appreciated during early 2023 following a weakening of the US dollar. This uncertainty has pushed many to choose crypto as their preferred store of value.

Meanwhile, Colombian President Gustavo Petro has actively pursued partnerships to build the nation's Web3 infrastructure. November 2023 saw Petro meet with blockchain experts to explore the modernization of billing processes for the healthcare system. Petro also hinted at the possibility for blockchain use in managing land registries and issuing land ownership titles in the nation. Such positive endorsement for Web3 tech spells good news for exchanges and traders hoping for an open and supportive digital asset landscape.

Opportunities and challenges ahead

Data suggests that crypto has been on the radar of many in Colombia for several years now, meaning the hurdles to further adoption — both emotionally and infrastructurally — could be relatively low. A 2019 survey found that 80% of Colombians were open to trading crypto. Of the survey respondents, 50% of those aged between 25 and 40 had already traded or expressed interest in trading cryptocurrencies such as Bitcoin (79%) or Ether (ETH) (<3%).

Did the bear market of 2022 extinguish these intentions and optimism? Not according to some. Evidence from local exchanges suggested that Colombian traders embraced falling prices in 2022, as the volume of deposits rose during the middle part of the year. Couple this resilience among traders with progress towards formal regulation for the space, and Colombia's crypto future is full of promise.

Mexico

Mexico stands alongside Argentina and Brazil as one of the LATAM nations that's driving the adoption of crypto across the region. In fact, the country is ranked sixteenth in Chainalysis' 2023 Global Crypto Adoption Index. Interestingly, according to the same index and study, Mexico's path to greater crypto adoption differs when compared to some of its regional peers — more on that below.

Looking ahead, a favorable and growing regulatory environment plus a series of key Web3 partnerships point to a bright future for crypto across Mexico. As of the last quarter of 2022, according to Statista, more than 7 million people in the nation held or traded cryptocurrency.

What's driving Mexico's crypto growth?

One of the major drivers of crypto adoption in Mexico is its large remittance market — the biggest of all LATAM states. The country was reportedly the second-largest in the world for remittances in 2022, according to World Bank data, with $61 billion flowing into Mexico from nationals working abroad. A large remittance corridor exists between Mexico and the U.S., and numerous crypto exchanges have capitalized on this opportunity by offering their services to support transfers. For many, remittances could be the gateway to deeper crypto adoption.

Meanwhile, influential partnerships anchored to blockchain technology are further opening access to crypto. In 2023, IBEX Mercado, a Bitcoin Lightning payment service provider, announced a partnership with Grupo Salinas, a major conglomerate in Mexico, to integrate Bitcoin Lightning payments for internet bills.

Overall, Mexico's leadership has positively embraced crypto and blockchain technology, a fact reflected in the relatively advanced state of regulation in the country. Mexico has issued regulation relating to companies that offer the purchase, sale, custody, storage, or transfer of virtual assets. And, a sandbox environment is available for companies "interested in testing innovative technologies or non-existent or regulated financial services reserved to financial entities."

Opportunities and challenges ahead

Growing connectivity and digitization across Mexico could unlock fresh opportunities for crypto adoption. A report from the Mexican Association of Online Sales (Asociación Mexicana de Venta Online or AMVO) showed that Mexico's e-commerce sector grew by 23% in 2022. Meanwhile, Mexico reportedly boasts the highest rate of growth in e-commerce and digital payments worldwide. These functions are ripe for crypto-led disruption across the medium and long-term.

Like many other countries, Mexico's crypto adoption could be slowed by the need for entities to meet strict and nuanced compliance requirements. However, this 'challenge' must ultimately be viewed as a positive, for the protection of users — first and foremost — and the integrity of the sector at large.

Venezuela

Venezuela ranked top among all LATAM nations for crypto adoption in Coinanalysis' 2020 Global Crypto Adoption Index, owing to the tool's role in mitigating economic and political instability. These motivations remain today, and in the years since, the nation's crypto ecosystem has seen various high-profile changes — some progressive, some controversial.

Venezuela's circumstances raise some necessary questions here: is the country's current crypto ecosystem sustainable? And what would a more stable political and economic climate do for crypto adoption in the nation?

What's driving Venezuela's crypto growth?

Venezuela's crypto adoption is being driven in large part by familiar factors: a fast-growing remittance market, hyperinflation that hit 193% in 2023, and a depreciating local currency. However, the situation is complicated by the nation's political standing.

The Trump administration placed sanctions on Venezuela's petroleum industry in 2017. Although the restrictions were scaled back in late 2023, the economic damage indirectly nurtured crypto's growth — albeit with some growing pains. The leadership tried to circumvent sanctions by trading in crypto and rubles, rather than the US dollar. Meanwhile, the government launched a state-backed petro digital currency in February 2018 to support the ailing bolivar currency. The project was scrapped five years later, but in its short tenure, the petro did help familiarize those in Venezuela with digital assets, their utility, and the trading process. In fact, Venezuelans received $37.4 billion in crypto in 2022, up 32% from 2021.

What's more, in June 2023, one of the nation's landmark hotels, the Hotel Eurobuilding in Caracas, began accepting Bitcoin and altcoins as payment, following in the footsteps of fast food giants Pizza Hut and Burger King.

Opportunities and challenges ahead

Evidently, Venezuela's population has been eager to adopt crypto as a hedge against soaring inflation and a means of keeping more cash in their pockets once it flows through remittance corridors. Meanwhile, a massive 92.5% of crypto activity in the country happens via centralized exchanges, according to Chainalysis' 2023 data. That all suggests the willingness and infrastructure are there for crypto to continue its emergence and normalization, should the brake pedal not be hit on the sector. Some would argue it already has.

Despite Venezuela being among the first Latin American nations to establish a crypto oversight body, called Sunacrip, in 2018, that same entity was shut down to be "reorganized" in September 2023. March 2024 has been earmarked for the body's reopening, but Sunacrip's past corruption scandal might have caused untold and irreversible damage to the space.

And what about El Salvador?

You'd be right to question why Bitcoin maximalist El Salvador doesn't feature on this list. The nation's leadership is unmatched in its commitment to embedding Bitcoin within the financial system. El Salvador was the first country to adopt Bitcoin as legal tender in 2021, and at the same time launched the Chivo Wallet, which allowed users to make payments, send money, and make withdrawals and deposits in both US dollars and Bitcoin. Salvadoran President Nayib Bukele has seemingly been Bitcoin's biggest champion in political circles, seeing it as the answer to financial inclusion, cheaper remittances, and more efficient payments.

So what of crypto's adoption in the country? Despite the slew of incentives offered, just 12% of the population used Bitcoin at least once to purchase goods and services in 2023. That represents a 50% fall from the year prior, according to research from the same source.

Why has El Salvador's crypto push stalled? First, demand is weakened by the prevalence of the US dollar, which became legal tender in 2001 and is widely accepted. The relative stability of the green back has lessened a need to adopt crypto as a hedge against inflation and an antidote to currency devaluation. Second, Bitcoin seemingly isn't trusted by many. A 2021 poll found that more than three-quarters of Salvadorans considered Bitcoin adoption as "not very wise" or "not wise at all".

Despite the country's Bitcoin dream not yet materializing, the government's overwhelming support for digital assets makes El Salvador an important jurisdiction for crypto in Latin America.

The final word

To many in Latin America, crypto is both an invaluable tool for financial preservation and a compelling alternative to traditional financial systems in need of a rewrite. Knowledge of crypto is high — the consequence of those who've chosen digital assets as a hedge against inflation and a means of holding onto more of their hard-earned money. Governments, meanwhile, have wielded Web3 technology in myriad ways, adopting it to find efficiencies, prevent fraud, and bring stability.

No two LATAM nations are the same for their progress and attitudes towards crypto adoption, and although challenges surely lay ahead, there's no shortage of room for the sector to continue its impressive growth.