The worldwide adoption of digital currency has significantly increased over the last year despite its high volatility and dramatic fall in value.
European countries and the United States are now leading the bitcoin market in terms of its usage. However, according to BitPay’s recent statistics, the highest rate of bitcoin adoption is recorded in Latin America.
Since 2014, the volume of bitcoin transactions in Latin America has risen by 510%, whilst the amount of transactions in Europe demonstrated a growth of 70%. It is the only country in Latin America that shows such a high growth of cryptocurrency usage, primarily witnessed among small businesses.
Two months ago, The New York Times Magazine published an article, which analyzes the condition of the bitcoin market in Argentina. For many Argentines, the article says, digital currency is a way to avoid the banking system, which forces citizens to use the devaluing national currency.
Argentina is the country with one of the globe’s highest inflation rates, which amounts to more than 20% a year. By the end of 2014 the peso dropped by 25% less since the beginning of the year, the article reads.
The country is the only place where bitcoin is used by ordinary people for real commercial transactions. Many Argentines, even wealthy ones, fear storing their funds in banks. Moreover, less than half of the population utilizes Argentine banks and credit cards.
Speaking on the future of digital currency in Argentina, Bitcoin Argentina co-founder, Franco Daniel Amati, told FT: “A recurring inflation crisis, capital controls and overall financial repression make life very difficult in Argentina. More and more people here are looking for ways to get around these problems, and bitcoin is the perfect solution.”
Some entrepreneurs and companies have already started providing bitcoin payments solution to customers in the region. For instance, Belize-based online payment system, Advanced Cash, is accepting payments in virtual currency for top-ups to its digital wallets and prepaid cards utilized all over Latin America.
Last month, bitcoin platform, called BitInka, announced its plans to launch its services in Chile, Argentina and Colombia. The South America’s company is already operating in Brazil, Bolivia, Peru and Venezuela. Opened in 2013, BitInka enables its users to withdraw and convert virtual currency into many local currencies of Latin America, including Argentinian peso.
In April, the largest social network in Latin America, dubbed Taringa, began paying content creators with digital currency. The company’s co-founder Hernan Botbol noted the decision to launch a bitcoin reward program was provoked by a tough economic situation in the region. He believes the new project will help to attract new users and thus will promote the use of bitcoin in Latin America.