Different use cases of cryptocurrencies around the world stimulate disparate crypto markets

Different use cases of cryptocurrencies around the world stimulate disparate crypto markets

Illustration: Megan Robinson / Axios

Different economic conditions around the world lead to two contradictory cryptocurrency markets – one that resembles the original vision laid out over a decade ago, and the other driven by a more recent development.

News Leadership: The dollar and other stablecoins linked to currencies prove their value in countries where the value of the local currency fluctuates from day to day. But the “disproportionate embrace of DeFi by the United States and Canada” has led to an entirely different crypto market, according to a new report from research firm Chainalysis.

In numbers: Crypto transactions in the Latin American region reached $562 billion as of June 2022, up 40% from last year’s total, according to Chainalysis. 2o22 geography of cryptocurrency Thursday report. (over here Last few years.)

  • The report said that people in the region are generally turning to cryptocurrency to save, send payments, or search for alpha.

the other side: Where value storage and payment sending dominates the activity, crypto markets can develop differently from regions where decentralized finance is being embraced.

  • Chainalysis found that the focus of the US and Canada on DeFi has led its market to behave differently from the rest of the world over the past year.
  • This means that the fluctuations were more brutal.

detailsThe Chainalysis report says: Record high inflation in the pockets of Latin America and an unstable local currency mean that people in the region are using stablecoins to buy or as a store of value, rather than to get cash under mattresses and the like.

there Country specific directions From the note:

Mexico The largest exchange, Bitso, shows how great crypto payments can be.

  • Bitso processed more than $1 billion in remittances from the United States to Mexico in 2022 as of June, growing 400% annually and about 4% of the remittance market in Mexico, according to a Chainalysis report.
  • Note: The largest central exchange in the United States, Coinbase, which started before the announcement of layoffs and curbing expenses. beta program For payments aimed at international growth.

Brazil It is a rare place in Latin America where the dominant use of cryptocurrencies is speculative trading, said Chainalysis, citing Thomaz Fortes, crypto pioneer at Nubank, one of the world’s largest digital banking platforms.

  • “Customers want a way to expand their profits,” Fortis said.
  • Note: This week Nubank said it was planning its own crew Code; Among its supporters is Warren Buffett’s Berkshire Hathaway.

Argentina Embracing stablecoins, USDT, USDC, and USDD are popular in Buenos Aires – simply because they are pegged to the dollar, are digital and have no buying limits.

  • More than 31% of the volume of small-volume cryptocurrencies in Argentina comes from selling stablecoins, compared to just 26% from Brazil and 18% from Mexico, according to Chainalysis.
  • Note: People there get paid through cryptocurrency, as the blockchain community is developing there.

be cleverAnecdotes from El Salvador make Nayib Bukele’s grand experience with Bitcoin seem like a failedbut cryptocurrency adoption is taking root elsewhere.

bottom line“Users in countries with weaker economies tend to rely on cryptocurrencies for remittances, and if inflation is high, to maintain savings, while users in more developed markets such as Brazil treat cryptocurrency as a speculative investment,” the Chainalysis report said.

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