Our CEO and Co-Founder Edu Forte was visiting Buenos Aires during March, where he met individual and institutional investors as well as financial advisors. From those conversations we drew some interesting conclusions about the adoption of crypto in a country with monetary issues.
LATAM, a crypto-friendly context
What is evident is that the adoption of cryptocurrencies and their real use cases is on the rise, not only due to the country’s macroeconomic context but also because of the real utility they offer in Latin America in general. This is driving their adoption due to the ease and cost-effectiveness, which is something we are not seeing in Europe.
Real usage of NFTs
An example of this is Flybondi, the Argentine airline that has become the first in the world to issue tickets in NFT format. In Argentina, the need for and daily use of cryptocurrencies are advancing very rapidly, and this is spreading to all levels of society, from high-net-worth individuals who see them as a way to get more returns on their assets to young people who use them to protect their savings and unbanked people who can now access a capital market that was previously closed to them.
How are cryptos being daily used?
The country’s macroeconomic context combined with technology is driving the development of cryptocurrencies in Argentina very quickly, and this is spreading to all layers of society. Both retail users and fintech companies like Lemon and Belo are using cryptocurrencies in their day-to-day operations, while professional or high-net-worth investors see them as a way to make their assets work more efficiently.
Crypto as a bridge to USD
For context, the exchange rate between the US dollar and the Argentine peso is currently around 1 USD to 103 ARS. This is significant because access to dollars is a crucial issue in Argentina due to the strength of the US economy, and cryptocurrencies are becoming an increasingly popular way to access dollars.
Another important aspect to highlight is that cryptocurrencies allow for saving and translation into dollars in a more straightforward way. This is particularly important in Argentina, where the Peso is subject to high inflation rates and economic instability. The use of cryptocurrencies offers a way to protect savings and assets from these fluctuations, which is particularly appealing to high-net-worth individuals.
Spreading crypto to all levels
In summary, the adoption of cryptocurrencies in Argentina is on the rise due to their real utility and the country’s macroeconomic context, which is spreading to all levels of society and investment levels. Cryptocurrencies are allowing people to protect their savings and access a previously closed capital market, making them a valuable tool for the country’s economic and financial development.
At CommonSense we think we have a huge opportunity in Argentina to help private and institutional investors to start building their digital wealth.