Latin America Prefers Centralized Cryptocurrency Exchanges, Chainalysis Report Indicates
Summary:
A recent report by Chainalysis highlights Latin America’s preference for centralized cryptocurrency exchanges over decentralized ones—a trend contrary to global patterns. Notably, Venezuela, dealing with a severe humanitarian crisis, shows 92.5% inclination towards centralized exchanges, leveraging cryptocurrency primarily to sustain its healthcare system during the pandemic. Colombia also leans towards centralized exchanges (74%). In the Chainalysis Global Crypto Adoption Index, Brazil, Argentina, and Mexico feature in the top 20, while India leads globally.
Blockchain data company Chainalysis recently disclosed in a report that, unlike the global trend, Latin America prefers their cryptocurrency exchanges to be centralized over decentralized. The report, released on October 11, recognized Latin America as the seventh largest global contributor to the cryptocurrency economy, shadowing closely the markets of Middle East, North America, Eastern Asia, and Eastern Europe. The Chainalysis report highlighted that Latin American crypto activity largely steers towards centralized exchanges.
In countries within this region, there's a considerable gap between their crypto platform preferences and the world average. Globally, the distribution of crypto activity averages out to 48.1% through centralized exchanges, 44% via decentralized exchanges and 5.9% through other forms of decentralized finance or DeFi activities. Standout figures emerge from Venezuela, which demonstrates a heavy leaning of 92.5% towards centralized exchanges, whereas engagement with decentralized exchanges only reaches 5.6%.
Venezuela has also been highlighted in the report as a unique case of increased crypto adoption due to the country's ongoing serious humanitarian crisis. The study reveals that during the peak of the COVID-19 pandemic in 2020, cryptocurrency became a critical lifeline for Venezuela's healthcare industry, when the government's political stance against international aid caused traditional methods of payment to fall through.
From its share of activities across crypto platforms, Colombia earmarks 74% for centralized exchanges, and only 21.1% for decentralized exchanges. The report also positions three Latin American countries -- Brazil (9th), Argentina (15th), and Mexico (16th) -- amongst the top 20 on the Chainalysis Global Crypto Adoption Index. The leading positions in the index are claimed by India, followed by Nigeria and Vietnam, ranking second and third, respectively.
Published At
10/15/2023 5:02:42 AM
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