In accordance with joint research conducted by the Inter-American Development Bank (IDB) and the Cambridge Centre for Alternative Finance (CCAF), Latin America and the Caribbean have displayed remarkable growth in the cryptocurrency domain. Compared to the numbers in 2016, the count of crypto-based operators in these territories has soared twofold.
The study, conducted over three months in 2022, encapsulated the perspectives of 52 private companies and public institutions, shedding light on the pivotal trend observed from 2020 up until now: an encouraging uptake. Key personnel like Bryan Zhang, co-founder of CCAF, emphasized the need for a deeper comprehension of this emerging market and the urgent need for collaborative efforts to ensure the secure and sustainable growth of this industry.
The report points to over 170 digital asset firms operating in the region during 2022. The majority of these headquarters seem to gravitate towards Argentina, Brazil and Mexico, while Colombia and Chile emerge as potent areas ripe for business expansion. Interestingly, almost 80% of the 31 public sector respondents appear to endorse cryptocurrencies for their complementary virtues to conventional banking methods, and only a meager 7% considered them “useless”. This indicates a seismic shift in perception, accentuating cryptos’ potential as instruments for initiating a more inclusive financial paradigm.
While great promise pervades the crypto scene in Latin America and the Caribbean, heralded as a “game-changer” by Anderson Caputo, chief of the IDB’s finance division, it’s equally crucial that industry players and regulators sketch an innovative, safe ecosystem premised on consensus and regulated by clear policy frameworks.
The main growth opportunities perceived by private-sector respondents hinge on incorporating more corporate clients and further enlarging the scope of decentralized finance (DeFi) services. This forms the crux of optimistically bridging the gap between the surge in cryptos and those currently underserved by traditional financial services.
Nevertheless, a note of caution persists, as regulators register no imminent plans to formalize DeFi regulations. The report reveals that half the regulators queried do not envisage implementing relevant DeFi governance within the next five years. Hence, while the surge of cryptos in Latin America and the Caribbean generates much excitement, it may be wise to question whether we’re roaring full steam ahead, sans effective regulatory brakes.
Source: Cryptonews
