While countries in Latin America have turned out to be quite ‘crypto friendly’ for the most part, one of the first countries that adopted a pro-crypto stance was none other than Venezuela. The United Nations recently reported that Venezuela ranks in the third spot amongst countries in terms of crypto adoption. The report was issued in the previous month and it disclosed that between September 2009 and June 2021, there had been a 2,300% growth in the crypto ecosystem. It also revealed that the primary catalyst for this massive growth was the COVID-19 pandemic.
Venezuela’s crypto adoption
The United Nations issued a report last month on Trade and Development, which discovered that the list of countries that have the highest crypto adoption rate puts Venezuela at the third spot, which means it follows Russia and Ukraine as the top two but not in that order. The report also explored the reasons behind the growth, along with regulations for cryptocurrencies.
It also discovered that cryptocurrencies are held by at least 10.3% of the Venezuelan population. The second country with the highest rate of crypto adoption is Russia, as statistics show that 12.7% of the Russian population owns cryptocurrencies. This could be due to the economic conditions of these countries and the price swings in their local fiat due to their respective situations.
According to the report, developing countries have proven to have a more favorable stance where cryptocurrencies are concerned. Out of the top 20 countries with the highest rate of adoption, there are 15 developing countries on the list, in accordance with the standards of the United Nations.
The report also highlighted the various reasons that have contributed to the growth of crypto adoption in these developing countries. First off, the document said that the global coronavirus pandemic played a key role in boosting crypto adoption. The report said that crypto turned out to be an attractive channel for sending remittances, due to its speed and price.
Traditional remittance services are already very costly and the pandemic saw them rise even higher because of lockdowns and other disruptions. Moreover, another reason that has resulted in the widespread adoption of cryptocurrencies in these countries is that people use these digital assets as a means of hedging their savings.
Therefore, it is not surprising that countries like Venezuela and Argentina are high on the list of countries with widespread crypto adoption, given their tough inflationary situation. Governments in the region have also had to come up with a regulatory response because of the expansion in terms of adoption.
There is already a clear crypto regulatory framework that exists in Venezuela, which has established crypto and bitcoin mining as legal activities. As far as Russia and Ukraine are concerned, the two countries are also working on developing their own respective regulations for the crypto space in order to provide clear rules to those that are part of it and wish to invest in it.