The use of stablecoins is increasing in Argentina to mitigate the country’s inflation and economic instability.
For years, Argentina has been experiencing high inflation, and one of the ways citizens are trying to cope with the crisis is through the use of stablecoins. According to a new report by Chainalysis, 61.8% of cryptocurrency transactions in the country are represented by stablecoins. According to the U.S. company, Argentina’s stablecoin market is one of the largest in the world in terms of transaction share, 17% higher than the global average.
Inflation and the continuous devaluation of the peso are the main reasons why many Argentinians seek refuge in the U.S. dollar. Dollar-pegged stablecoins allow users to access this possibility in digital form, which is more convenient than paper bills. Among the most used stablecoins are Tether (USDT) and USD Coin (USDC).
Regional data
In South America, Argentina ranks among the countries with the highest stablecoin usage rate, surpassed only by Colombia. In Colombia, stablecoins represent 66% of cryptocurrency transactions, while in Brazil the percentage stands at 59.8%.
Inflation and cryptocurrencies
In Argentina, inflation reached 236.7% in the 12 months up to August 2024, according to the Argentine central bank, pushing more than half of the population into poverty. Despite recent signs of a decline in inflation, the impact remains significant.
In Venezuela, also hit by high inflation, there is a sharp increase in cryptocurrency usage. Chainalysis reports that the country has received the largest volume of cryptocurrencies in the region.
