In recent years Latin America has become one of the fastest growing regions in cryptocurrency adoption. According to data collected by Mastercard in 2022, at least 51% of Latin Americans have used cryptocurrencies to make purchases or send payments. As more countries in South America face record inflation, citizens turn to this type of digital asset to preserve their purchasing power, with Argentina being one of the main forerunners in this matter.
Survey data for Latin America suggests that Argentina has one of the highest rates of cryptocurrency adoption in the region. For example, according to Americas Market Intelligence (AMI), in 2022, 27% of Argentine respondents bought cryptocurrencies “regularly”, this number being 15% more than in 2021. It also emerges from the survey that 98% of Argentines were aware of cryptocurrencies and that one in five Argentines planned to buy cryptocurrencies in the future.
On the other hand, the Global Cryptocurrency Adoption Index carried out by the Chainalysis firm for the year 2022, placed Argentina in 13th place. The researchers note that the adoption of stablecoins in particular is exceptionally high, allowing Argentines to take refuge from high local inflation.
By knowing a little more about Argentina’s relationship with cryptocurrencies and the crypto ecosystem in general, we can better understand the challenges and opportunities that exist for its adoption. Likewise, the situation in Argentina may also help explain why Latin America is showing greater interest than other regions.
What is the reason for the high adoption of cryptocurrencies in Argentina?
As mentioned at the beginning, the main cause that we could point to is high inflation rates. During different periods of its history, Argentina has dealt with annual inflation rates of two and three digits for its national currency, the Argentine peso, the last decade being no exception where the annual inflation rate went from 10.8% in 2012 to 94.8%. in 2022.
For this reason, Argentines have historically used the US dollar as an alternative to the peso and therefore as a haven of value. To this, we must add that in Argentina various taxes and restrictions have been implemented for trade between the peso and the dollar, such as a 45% withholding tax on transactions made in dollars with a credit card or the restriction on their residents for the purchase of dollars in banks limited to a maximum amount of USD 200 per month.
We understand that this has led many Argentines to explore digital currencies such as Bitcoin, Ethereum and stablecoins as alternatives to transact and as a method of saving. Cryptocurrencies are typically more accessible, cheaper, allow faster transfers, and are unrestricted compared to fiat currencies. In addition, virtual currencies are a more practical and secure option than the alternative that buying dollars on the black market represents.
Our survey
In our survey we specifically focused on the Argentine cryptocurrency user, seeking to cover different aspects of them and their relationship with cryptocurrencies, which is why we divided the questionnaire into three main categories:
- About you, to know demographic information.
- About cryptocurrencies, to understand financial behaviors and use cases.
- About the apps, to find out the tools they use to carry out their operations.
It is not our objective to draw conclusions from the data obtained. On our part, we hope to be able to make a small contribution to whoever is looking for this type of information and to be able to help them understand what particularities cryptocurrency users have, so that the products and solutions focused on them meet their real needs.
Methodology
The data presented here was obtained through a survey that was published on different digital platforms during the period August 2022 / August 2023 and in which a total of 500 people participated.
The territory that was covered was Argentina in its entirety without distinction or preference by locality, gender or any socioeconomic level and it was completed 100% anonymously. The only restriction that existed, due to method issues, was that we were not allowed to include minors under 18 years of age in the broadcast. In any case, as will be seen in the results, this did not prevent us from obtaining valuable information about the age range.
Observations
- Bitcoin is the favorite cryptocurrency of those between 36 and 45 years of age, representing 38.3% of the total. Bitcoin is also the favorite cryptocurrency for women, chosen as the most used by 65% of them.
- Stablecoins are the favorite cryptocurrencies of the age group between 25 and 35 years, representing 35.2% of the total.
- Although Lemon Cash and Binance are by far the two most used platforms, for the age range between 36 and 45 years old, it places them on opposite paths: only 10.8% of them choose Lemon while 36.7% choose Binance over all other options.
- The oldest profile, those who are +56 years old, are the ones who have been operating with cryptocurrencies for the longest time, since they represent 33% of those who have been doing so for more than 3 years, while the youngest, those between 18 and 24 years old, represent 64% of those who have done so for less than a year.
- While no woman indicated investing more than 10% of her income in cryptocurrency, 28.7% of men indicated doing so.