According to Forbes data, Argentina currently has the highest cryptocurrency adoption rate of any country in the Western Hemisphere.
The rising inflation of the local currency, the peso, and the complicated access to the dollar have been among the primary drivers behind the current adoption of crypto assets, especially USDT.
Argentina Leads Cryptocurrency Adoption
Forbes a report The report highlights that Argentines are increasingly turning to cryptocurrencies as a hedge against inflation in their local currency. The country’s crypto adoption rate is higher than any other country in the Western Hemisphere.
According to Forbes, analysis using SimilarWeb indicates that 2.5 million of the 130 million users on the top 55 cryptocurrency exchanges are from Argentina. Popular exchanges in the country include Binance, eToro, BingX, HTX, and Bitget.
Chainalysis, a cryptocurrency data analytics company, Reported Argentina leads Latin America in terms of raw transaction volume, reaching around $85.4 billion by July 2023. Unlike many other investors who buy crypto assets like Bitcoin primarily for the sake of making money, Argentines typically buy stablecoins like USDT and synthetic dollars, which have a market cap of $112 billion.
BitGet Latin America President Maximiliano Heinze recently commented:
“Argentina is an anomaly market where so many people are buying USDT that they don’t have room for anything else. We don’t see this anywhere else. Argentines are buying spot Tether and not doing anything with it.”
Inflation-based adoption
Forbes says that the current crypto adoption in Argentina is driven by high inflation rates, with the peso’s inflation rate hitting 276% in the past 12 months. Things are so bad that Argentines are shifting their diet from beef to cheaper proteins like chicken and pork. Forbes reports that some forecasters are predicting steak prices to rise by as much as 600% this year.
The weakness of the currency has prompted Argentines to seek alternatives, including buying dollars on the black market, which offers unfair rates and risks of theft and counterfeit currency.
Over the past few years, stablecoins have seemed like the perfect haven for Argentines, due to their ideal exposure to the dollar and ease of access.
Argentina’s new bitcoin-friendly president, Javier Milei, seems open to the idea of the country switching to the dollar. He predicts that as more and more competing currencies emerge, including the dollar and crypto assets, people will use the peso less and less, and eventually stop using it.
“We will go to dollarization and eliminate the central bank so that corrupt politicians cannot steal by printing money,” President Milei added.