Ripple, a cryptocurrency and payment company, published an article that looks at the opportunities that Latam presents for cryptocurrency companies as regulated payment rails shift to cryptocurrencies. While the region faces some obstacles due to its economic characteristics and the dominance of centralized banks, the organization believes there are lucrative prospects for companies partnering with these banks to bring cryptocurrency to the masses.
Ripple sees opportunities in Latam
Ripple, a bank payments, money transfer and cryptocurrency company, believes that Latam could be a hot spot of opportunity for cryptocurrency companies in the future. In a recent article, Ripple looks at current payments and possible integration that cryptocurrency services may find in the region. According to the company, cryptocurrency companies may find these opportunities when banks start integrating cryptocurrency services into their platforms.
On this idea, the company stated:
Traditional banks, fintech companies and governments have a lucrative opportunity before them to more widely adopt crypto-forwarding technology to address this underserved and fragmented market.
This suggests that cryptocompanies are working with banks and fintech companies to take an active role among the main rails for transactions and payments in these countries.
Barriers to the process
However, this integration process will likely not be without challenges. Traditional payment rails in the region are bank-driven, and banking coverage is very high in some of the largest countries: in Brazil and Chile, 88% and 82% of the population, respectively, use banking services. Opportunities come in the form of offering services with lower fees than at traditional institutions, which can lead people to switch from cash and other payment methods to digital transactions.
The inclusion of cryptocurrency companies in the various debates that are taking place about regulation will also be very important for the future of cryptocurrencies in the region, the article says. Ripple believes this process will be positive, stating that:
Smart and progressive regulation will spawn further successful regulation, leading to increased innovation and progress in cryptocurrencies across Latin America.
In this sense, there is a regulatory awakening on the continent, with countries such as Brazil and El Salvador leading the way in cryptocurrency regulation. Brazilian lawmakers have vowed to submit a unified regulation of cryptocurrency assets to Congress to be approved in the coming months, while El Salvador declared bitcoin legal tender last year by passing a bitcoin law.
The scenario presented also includes a gradual detachment from the dollar and U.S. markets, which currently have significant influence in the region. On this point, Ripple concluded:
The possibility of isolation from financial fluctuations in other regions highlights the main reason why achieving compatibility across Latin America and preventing a downward trend in U.S. risk is so important for LATAM economies.
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