We know that many countries with weak national economies have people who hedge against their fiat currencies by investing in crypto assets including those pegged by their national currencies. The trend is very apparent in South America where inflation is threatening to destroy several economies and create a perfect environment for financial collapse.
For example, Peruvians are using PEN (pegged by Sol) as the best way to store their money and often exchange them for other cryptocurrencies that may outperform the national currency. Several notable exchanges are working in the country and offer a wide selection of assets to their local customers with daily trading volume growing every day.
A recent study about crypto assets in Venezuela, where inflation is rampant and the economy seems to be in shambles, revealed that over 18% of all citizens have crypto assets in possession. Most investors prefer BTC, ETH, DOGE, and ADA. In terms of holders of crypto per capita, the country is 8th in the world in terms of the rate of crypto adoption with only a handful of countries still above the rankings (examples are India, Australia, Singapore, and Hong Kong).
The study estimates that over 3.5 million people in Venezuela have some coins to their name and many use them as a hedging mechanism against inflation. Other South American countries are less eager to purchase BTC, but many still have impressive daily trading volumes.
It is important to remember that some nations believe that switching to an economic model where cryptocurrencies can be used to at least some degree is beneficial in the long run given the current situation with globalization. We may see even more disruptions in global trade. For example, Iran is already using cryptocurrencies to pay for some imports. Many other countries that suffer from international sanctions or unfavorable trading terms may follow soon.
It is still an early phase of global adoption and we have a long road ahead of us, but developments in South America paint a bright picture of the future where more common folks choose to invest in crypto.
