Recent reports by Chainalysis have shown a sharp rise in crypto transactions within Latin America, a trend that economic experts believe is only getting started. Unsurprisingly, multiple trading platforms are launching operations in countries such as Argentina and Brazil as they rush to meet the growing demand for secure crypto exchanges.
Moreover, countries are already creating legal frameworks that integrate crypto activities into their traditional financial systems in an attempt to regulate this industry. Most notably, Brazil, currently ranked 5th globally in crypto adoption, has already finalized its Virtual Asset Service Provider regulatory framework. The framework is expected to come into effect in early 2026. Let’s look at the latest developments driving crypto adoption in various South American countries.
Eroding trust in traditional banks
The latest peso crisis in Argentina recently forced the country’s Central Bank to restrict people from reselling the dollar. This tightened control over the peso has led to Argentines turning to stablecoins as they look to bypass the Central Bank’s inflated official exchange rate. The government values the peso more than 7% higher than the market rate.
Besides, trading platforms have seen almost a 50% surge in stablecoin-to-peso sales within this period, highlighting the significance of crypto in the region. The stockbrokers based in Buenos Aires have been quoted as claiming that they are making these trades every day in an attempt to protect themselves from inflation in the country. Although President Milei, Argentina’s president, won big in the recently concluded midterm elections, his government has a huge task in limiting the current peso devaluation.
The move to buy stable coins pegged to the dollar comes as no surprise, given that financial crises in the past have even led to banks freezing withdrawal of savings. Other factors, such as high public debt, high inflation, and fiscal imbalances, have also fueled the erosion of trust in traditional banks.
Recent industry insights show that 61.8% of crypto activities in Argentina involved stablecoin exchanges. In Brazil, stablecoins accounted for over 59% of crypto activities.
Rush to scale stablecoin solutions
With most South American users relying on stablecoins as a hedge against currency devaluation, fintech companies are now expanding their B2B and B2C services in the region. In Brazil, major banking institutions such as Mercado Pago and Itaú Unibanco have integrated digital assets into their services. What’s more, local crypto exchanges in the country, including Mercado Bitcoin and Foxbit, are now offering regulated access to crypto markets, making Brazil’s crypto activity more than double in a year.
Meanwhile, stablecoin Pay-ins in Colombia have brought about massive advantages to LATAM businesses compared to traditional methods. A cross-border transaction from the US to Colombia that costs $12 using a traditional marketplace escrow only costs $0.01 in stablecoin pay-ins. Add this to the speed and reliability of these stablecoins, and it's no surprise these businesses are finding stablecoins lucrative.
Volodymyr Nosov – president of W Group, a global fintech company, after securing a license to operate in Argentina, said, “Latin America is one of the most dynamic regions in the world when it comes to crypto adoption.” The company is also preparing to launch operations in Brazil once the country’s VASP regulatory framework comes into effect.
Besides, the latest partnership between Circle and Thunes has played a huge role in increasing stablecoin liquidity by leveraging the USDC stablecoin within LATAM marketplaces.
El Salvador’s and Argentina’s recent IMF bailouts
When El Salvador’s president Nayib Bukele announced that his country would adopt Bitcoin as its legal tender in 2021, very few saw it as a viable move. Well, the recent IMF bailout and the alteration of the country’s Bitcoin policy may have proven his critics right. That said, the country has continued to make Bitcoin purchases, highlighting an unmatched commitment to crypto by Bukele’s government.
Now considered a crypto safe haven, the move has seen platforms such as Tether and Bitfinex Derivatives move their headquarters to El Salvador. We can expect crypto-backed businesses and compliant exchange platforms, to launch their operations in the Latin American market. This shift in payment solutions are also reflected in the growing use of cryptocurrency at online casinos.
Meanwhile, with its diminishing foreign exchange reserves, Argentina has also been at the end of an IMF bailout. This $20 billion bailout package in April was Argentina’s 23rd program with the IMF, making the country the IMF’s largest borrower. Experts believe that the bailout should help Milei stabilize the country’s troubled economy. That said, the last IMF bailout in 2022 under President Alberto Fernández saw more people turn to crypto to secure their savings. We can expect the same after the recent loan.
Moving forward, the increased adoption of crypto in LATAM, especially in Brazil, is likely to see regulators tighten the rules on taxing virtual assets. From embedding AML/KYC compliance standards to reclassifying the exchange of virtual assets pegged to fiat currency (stablecoins) as forex operations, we’ve already seen efforts made towards crypto regulation. We can expect more regulations in 2026 and beyond as the region tries to achieve stability and transparency in crypto.
