Venezuela, one of the first “crypto-friendly” countries in Latam, ranked third in adoption, according to a report issued by the United Nations. The report, issued last month, states that the cryptocurrency ecosystem grew 2,300% between September 2019 and June 2021, with the Covid-19 pandemic being one of the main catalysts for this growth.
Venezuela is among the countries that have adopted crypto the most
Areportissued by the United Nations Conference on Trade and Development
found that Venezuela ranks third among the countries that have adopted cryptocurrencies the most, behind Russia and Bulgaria. The report, which also addressed the causes of this growth and crypto regulation, found that 10.3% of Venezuelan citizens hold cryptocurrencies.
The Russians were second on the list, with 11.9% of their population holding crypto, and Ukraine was first, with 10.7% of its citizens holding some crypto. This can be explained by the economic conditions facing these countries and the currency swings caused by conflicts.
The report also shows that developing countries are more receptive to cryptocurrency proposals. Of the first 20 countries with the most adoption, 15 are identified as developing countries by UN criteria.
Reasons for Growth
This study also attempts to explain why crypto has grown so much in these developing countries. It notes that the Covid-19 pandemic played an important role in the introduction of cryptos. It states.
The use of cryptocurrencies was an attractive channel for remittances in terms of price and speed. During the pandemic, the already high cost of traditional money transfer services rose further during the lockdown period due to related disruptions.
The second reason for this growth has to do with the fact that citizens of these countries see crypto as a useful tool to hedge their savings. For this reason, countries such as Argentina and Venezuela, which have faced severe inflationary periods, ranked high in the cryptocurrency adoption reports.
This expansion has also spurred regulatory responses by governments in the region. Venezuela already has a fairly clear legal framework for cryptocurrencies, establishing bitcoin and crypto mining as legitimate activities. Russia and Ukraine are also in the process of establishing clear rules for the use of crypto.
Image credit: Shutterstock, Pixabay, Wiki Commons