Latin America’s steadiest economy in the last three decades is suffering a slump. Locals are turning to crypto, especially stablecoins for protection.
With a lifestyle familiar with the most stable economy in Latin America, residents of Chile are turning to stablecoins to protect their assets from recent record inflation and the increasing devaluation of the peso. In the last three months, local crypto exchanges have seen a 50% increase in stablecoin transactions.
During the second quarter of 2022, CryptoMarket, a Chile-based exchange with 200,000 members in the nation, saw a 50% spike in purchases of the two most popularly used stablecoins, Tether (USDT) and USD Coin (USDC).
CryptoMarket Chile country manager Eduardo Pérez de Castro said:
“Today, stablecoins represent 30% of users’ total purchases, and what they mostly choose to buy if it is their first time using the platform.”
Buda.com, one of Chile’s first crypto exchanges to start in 2015, has also noticed the increased interest in stablecoins.
The platform’s stablecoin market share increased from 11% in June to 20% in July. USDC is the third-most-traded currency on the site, after only Bitcoin (BTC) and Ethereum (ETH).
Jazmín Jorquera, chief operating officer at Buda, which has more than 500,000 users and operations in Chile, Argentina, Peru, and Colombia presented:
“We see this as a huge trend and something users are taking as an opportunity to buy U.S. dollars easily without having to go to a bank or exchange house.”
In June, the country’s year-to-year inflation rose to 12.5%, the highest record in 28 years. One month later, its peso currency hit a record low of 1,045 per U.S. dollar, 3.7% in one day, forcing the central bank to make a $25 billion intervention in the foreign exchange market to stop a higher devaluation.
OrionX, a Chile-based exchange with more than 100,000 users and operations in Peru and, soon, in Mexico, saw USDT become the platform’s second-most-traded currency during the last three months. Joel Vainstein, the co-founder of the exchange, said:
“The common Chilean citizen is turning to stablecoins to save money and conserve value.”
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