🌎 Trump is back, what awaits crypto in LATAM?

EXTRA: Argentina's central bank promotes currency competition

AuthorAuthor

Frontera EC & Abraham Rivv
January 24, 2025

👋 Hi welcome to Frontera, the newsletter dedicated to showcasing the reality of crypto in Latam. Join industry leaders from The Ethereum Foundation, Binance, Crypto.com, dYdX and others to understand how Latin America has become one of the most dynamic and promising markets in the crypto world and how you can address this market.

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📰 Trump is back, what awaits crypto in LATAM?

Well guys, Trump is back… The return of Donald Trump to the presidency could have a significant impact on the crypto market in Latin America, especially if we see pro-crypto policies adopted in the United States.

Let's explore the impact of this on crypto in LATAM.

1/ Increased regulatory pressure and transformation of regulatory frameworks 

One potential consequence of Trump’s return is the creation of clearer regulatory frameworks in the United States, which could impact some countries in the region. 

Trump has expressed his interest in making the United States the "crypto capital of the planet" and even creating a "strategic bitcoin reserve". This could inspire Latin American governments to adopt more favorable policies toward crypto and blockchain tech to align with global trends.

For example, Mexico’s government has taken a cautious stance on cryptocurrencies, but a shift in U.S. policies could incentivize Mexican authorities to reconsider their approach. This could result in a clearer and more favorable regulatory framework for crypto, making it easier to integrate them into the traditional financial system and open new opportunities for crypto service providers, exchanges, and investment fund operators.

Also, Brazil is already working on a crypto regulatory framework, and other countries like Colombia and Peru might follow suit to create policies that favor the adoption of crypto. This push for regulation could facilitate greater participation from financial institutions and tech companies in the crypto ecosystem, positioning Latin America as a key player in the global cryptoassets space.

2/ Acceleration of blockchain and stablecoin adoption 

Latin America has already shown growing interest in crypto, particularly in countries like Brazil, Mexico, Argentina, Venezuela and Colombia, where cryptocurrencies are seen as a tool to protect against inflation, economic instability and the effective sending of remittances.

With Trump’s return and the strengthening of pro-crypto policies, it’s likely that the adoption of stablecoins and other blockchain-based solutions will accelerate by 2025, facilitating financial inclusion and improving economic stability in countries with high inflation or currency restrictions.

3/ Challenges for traditional financial systems and the globalization of cryptoassets 

Trump's pro-crypto stance could intensify tensions with traditional financial systems, which, paradoxically, could cause many Latin American countries to look at cryptocurrencies as a way to diversify their reserves and encourage investment. In countries with unstable economic policies or issues with currency devaluation, such as Argentina or Venezuela, crypto may be seen as a viable tool to hedge against inflation and promote economic stability.

4/ Opportunities for innovation and development of fintech ecosystems 

Mexico, for example, is in the midst of expanding its fintech ecosystem. 

With the adoption of more favorable crypto policies in the United States, synergies could be established between the fintech and crypto sectors in Latin America, driving technological innovation in the region. This would include the adoption of blockchain, stablecoins, and other decentralized financial products that would facilitate the inclusion of large segments of the population into the global digital economy.

When this happens, it will be interesting to see the birth of new products that use fintech in the front, and DeFi in the back.

5/ Impact of Trump’s protectionist policies on international trade 

Trump has adopted a protectionist stance, which could impact international trade relations. 

This could increase interest in crypto as a tool for cross-border transactions without relying on the traditional financial system and its restrictions. For Latin America, where international capital flows may be affected by U.S. policies, crypto would offer a viable alternative to sustain and promote regional and international trade.

Trump’s return to power could bring both challenges and opportunities to the crypto market in Latin America. What do you think, is LATAM ready to take advantage of the opportunity that the adoption of crypto could bring, or will it witness a new cycle of dependence on traditional financial systems?

📰 Latam Crypto News 📰

🇧🇷 Brazil

Brazil’s Central Bank announced that issuing crypto company licenses may take up to three years. Carolina Pancotto Bohrer highlighted the challenge due to limited staffing, predicting up to 100 applications. Final regulations are expected mid-year.

The study of Statista revealed that 96% of Brazilians have heard of or know about Bitcoin and crypto. According to the survey, of this 96%, 56% know what cryptoassets are and 40% know, but are not sure they understand what cryptocurrencies are.

Brazil is the third top country searching for Bitcoin prices, behind the US and India, according to CoinMarketCap. Despite interest, Brazil lacks a strategic Bitcoin reserve (for now).

🇧🇷 Coinbase joins ABcripto
Coinbase, the largest US crypto exchange, joins ABcripto (Brazilian Association of Cryptoeconomy), strengthening Brazil’s crypto market. The partnership aims to promote security, innovation, and regulatory clarity.

🇦🇷 Argentina

The Central Bank of the Republic of Argentina (BCRA) has introduced measures to allow people and businesses to use any currency in daily transactions, aiming to equalize payment methods in pesos and dollars. By February 28, shops can accept dollar payments via debit cards, and interoperable QR codes will include payments in both currencies.

The issue of currency competition was one of Javier Milei's main flags at the beginning of his government, highlighting the possibility of using bitcoin, crypto and other assets to pay for goods and services in Argentina.

Milei promised in December 2024 that free currency competition “will arrive in Argentina” this year.

Bitfarms leads with 870 BTC, enhancing its global mining operations, Mercado Libre holds 412 BTC, promoting crypto adoption in Latin America with its Meli Dollar stablecoin, and Globant holds 15 BTC.

🇲🇽 Mexico

🇸🇻 El Salvador

El Salvador adds 12 BTC, bringing its total to 6,044.18 BTC amid Bitcoin's new all-time high. Despite IMF restrictions, the country remains committed to its "HODL" strategy, reinforcing its pro-crypto stance and solidifying Bitcoin's role in its economic policy.

🇸🇻 Only 8 out of every 100 Salvadorans used bitcoin to buy or pay for something during 2024

A UCA report reveals that 77% of Salvadorans believe the economy remained unchanged with Bitcoin as legal tender in 2024 and only 13% see improvement. Additionally, just 4.7% feel their household finances improved due to Bitcoin.