2023-10-17 08:21:48
According to a recent report by blockchain analytics company, Chainalysis, Latin America has a tendency towards centralized exchanges (CEXs) rather than decentralized exchanges (DEXs), compared to the rest of the world.
The report, published on October 11, stated: that Latin America has the seventh largest cryptocurrency economy in the world, trailing behind the Middle East, North America, East Asia, and Eastern Europe.
However, he points out that cryptocurrency users in Latin America strongly prefer using centralized exchanges (CEXs):
“Latin America shows the highest preference for centralized exchanges of any region we study, and leans slightly away from institutional activity compared to other regions.”
Furthermore, in some countries within the region, the distribution of cryptocurrency activity by platform type is heavily skewed towards centralized exchanges (CEXs) compared to the global average.
The global average preference for cryptocurrency platforms is 48.1% for centralized exchanges (CEXs), 44% for decentralized exchanges (DEXs), and 5.9% for other decentralized finance (DeFi) activities.
Share of cryptocurrency activity in Latin American countries by platform type. Source: Chainalysis
However, the preference for centralized exchanges in Venezuela is much higher at 92.5%, while decentralized exchanges have a much lower preference at 5.6%.
The analysis highlighted that Venezuela It has a unique reason for its increasing adoptionThis is primarily due to a “complex humanitarian emergency.”
The report explains that amid the COVID-19 pandemic in 2020, cryptocurrencies played a pivotal role in directly assisting healthcare professionals in the country.
Related articles: DeFi is “disintermediate” and not “decentralized”: the French regulator
Therefore, cryptocurrencies became necessary because traditional payments were difficult due to the government’s refusal to accept international aid, influenced by political reasons.
On the other hand, Colombia shows a 74% preference for centralized exchanges, while decentralized exchanges represent only 21.1% of their preferences.
As for Argentina, it leads the cryptocurrency space in Latin America in terms of sheer volume of transactions, receiving an estimated $85.4 billion during the twelve-month period ending on July 1.
Latin America: Countries by value of cryptocurrencies received. Source: Chainalysis
On May 5, Cointelegraph reported that the Argentine Central Bank Block payment service providers From introducing cryptocurrency transactions to reducing the country’s payment system’s exposure to digital assets.
The Monetary Authority also stated that the purpose of this is to subject financial technology companies to the same regulations as traditional financial institutions in Argentina.
Meanwhile, three Latin American countries secured positions in the top 20 in Chainalysis’ Global Cryptocurrency Adoption Index. so Brazil ranks ninthwhile Argentina comes in fifteenth place and Mexico in sixteenth place.
India ranked first, while Nigeria and Vietnam ranked second and third, respectively.
Related articles: Reasons why post-millennials in the MENA region are investing in cryptocurrencies and social media platforms
Translated by Albayan Gherra
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