Regional Pulse

Cryptocurrencies (often known as “crypto”) are a digital form of money whose transactions are recorded using a public ledger. They are decentralized, meaning that no central bank controls them. 

Cryptocurrencies fall into a wider category of digital assets, which also includes non-fungible tokens (NFTs) and central bank digital currencies (CBDCs). These digital assets are held in a digital wallet. They can be traded for other types of cryptocurrencies or “cashed out” in the form of local fiat currencies. 

While government regulations may require crypto exchanges formally established in a Latin American country to collect customer information for large transactions, the ledger does not publicly show the individuals or groups associated with a particular wallet.

Cryptocurrencies may often be associated with scams or fraud, but they also offer financial inclusion opportunities for individuals and businesses in a region prone to inflation and informal work. This brings a unique set of risks and challenges to an area already under scrutiny for tax evasion, money laundering, and the penetration of organized crime. 

Here are three key things you should know about cryptocurrency use in Latin America.

Latin America lags behind larger economies such as the United States and Europe when looking at the volume of crypto transactions the region receives. However, it has proven to be a unique testing ground for crypto services due to factors including high inflation, informal work, reliance on remittances, and — in some countries — limited access to US dollars. 

While El Salvador has dominated the spotlight after making bitcoin legal tender in 2021, most of the crypto activity in Latin America happens in other countries. 

Argentina received about USD91.9 billion between July 2023 and June 2024, Chainalysis found — the highest amount of any country in the region. Brazil followed with about USD90.3 billion. Venezuela’s market expanded the most, with its value received growing 110% year-over-year. 

Four Latin American countries have a spot on the latest Chainalysis Global Crypto Adoption Index measuring grassroots crypto adoption: Brazil, Venezuela, Mexico and Argentina. 

The firm found that Latin America’s crypto market grew 42.5% year-over-year — the second fastest-growing region after Sub-Saharan Africa.

The age group with the highest crypto adoption rate was the 25 to 34-year-old segment, a study from Mexico-based crypto exchange Bitso found earlier this year. 

While Central America makes up a smaller share of crypto transactions than larger markets such as Brazil, Argentina and Venezuela, the region is notable for being home to several grassroots projects seeking to develop so-called “circular economies” with bitcoin. These include Bitcoin Beach in El Zonte, El Salvador; Bitcoin Lake in Panajachel, Guatemala; and Bitcoin Jungle in Costa Rica. Separately, a high-profile startup city on the Honduran island of Roatán called Próspera — which recognized bitcoin as a unit of account — gained international attention for its legal battles with the government.