What Cryptocurrencies Can Do For Latin America

Cryptocurrencies can be a major factor in Latin America breaking the shackles of financial enslavement. And it’s the tech-savvy who are already reaching out to it.

At Expressed Speed

The great British historian Eric Hobswahm once described Latin America [as] ‘a region where historical evolution occurred at express speed’. Recently, this could be taken as true. Civil strife in Ecuador and Chile just goes to show how things can change on the continent, especially in Chile —  a nation usually known for its economic stability (in South American terms anyway). The downright social dissolution in Venezuala, political mishandling in Brazil by President Jair Bolsonaro and the threat to the delicate peace accord (signed in 2016) between the Colombian government and the Marxist rebels of the FARC have plunged the continent into ‘possible’ turmoil.

The current COVID-19 pandemic is only fuelling the fire for more social unrest, which could create a scenario where the countries on the continent descend into something similar to the dark days of the 1960s and 1970s, when military dictatorships, murders and political intimidation were the order of the day.

Poverty has always been a problem in South America. And unemployment, especially for the black and Indian populations, a way of life for hundreds of years. This has only been compounded by the financial mess over the last decade caused by inflation, price hikes of consumer goods and the falling reserves of the respective countries’ central banks.

A real shit storm in the making, but one that continent has somehow got used to.

For most, though, pastimes like football and music have been a temporary deflector of the misery, giving a semblance of normality for a while until the pangs of hunger and other maladies come back.

Yet, it doesn’t have to be this way, as many — those more technically-minded and with enough foresight and trust in future technology — are turning the tide in the financial world.

Here’s a question:

Did you know that some of the highest rates of cryptocurrency adoption occur in South America?

Countries like Argentina, Brazil, Chile, Colombia, and Mexico all have record levels of users of cryptocurrencies on the planet, putting some of the developed world nations to shame.

One reason for this could be people’s trust in their nation’s currencies is at an all-time low.

High Adoption Rates

The Great Recession in South America, beginning in 2008, caused confidence to plummet. Argentina’s financial crisis starting last year, when inflation rose by more than 50% yet another. Brazil in 2016, when much the same went down. And let’s not forget about the Nicolás Maduro-led Venezuela economy, the continent’s basket case, living off the fumes of Hugo Chavez’s Marxist memory.

Those in the know have had enough. They see a different future, one where they have control over their financial decisions.

Because Fiat currency is fucked.

‘Cryptocurrencies have given the underworld a life jacket of anonymity.’

One reason for the popularity of Satoshi’s legacy is the security in which cryptocurrencies can be sent. With many Latin Americans living in North America and the Iberian peninsula for economic reasons, it is an easy solution for sending remittances to their families back home.

For a great number of the South American population (some say up to 50%), the reality of being unbanked is a massive obstacle to social acceptance and civil engagement.

Cryptocurrencies, however, do away with all this, dislocating the unbanked from the machinations of the bureaucratic nature of their nations’ financial ineptitudes.

Services like Criptolago from Venezuela, the Mexican startup Volabit, Panda from Colombia, Ripio out of Argentina and the Uruguayan startup Cryptofacil (currently shutting down, sadly) are changing the face of finance on the continent forever.

Cryptocurrency, and the underlying technology behind it, blockchain, are breathing new life into a continent that has, for too long, been under the cosh.

But I’ll leave the sublimity to Aracataca’s favourite son, Gabriel García Márquez:

‘In spite of this, to oppression, plundering and abandonment, we respond with life.’

Respond to life. That’s the thing.

And South Americans are doing it.

With proper regulations, the continent can be a world leader in cryptocurrency implementation, and be a model of blockchain use-case efficiency.

Robert Mugabe’s Ghost

Venezuela is a case in point, with an upsurge in use cases that will — if the trend continues — change the economic and political landscape of a nation rich in crude oil. Hyperinflation of the bolivar à la Zimbabwe has forced many to search for alternative ‘currencies’ as in peer-to-peer cryptocurrencies like Bitcoin.

This is only set to continue.

Venezuela is enough proof of that as it becomes more isolated from the realities of the world outside, while corruption, blackouts and drug trafficking are a part of everyday life.

Even though things look on the up, as is always the case in South America, the black hats, the criminal masterminds of the continent wandering the keyboards and virtual world from Montevideo to Tijuana have their eye on profit to the detriment of the common man.

Profiteering and gangsterism go hand in hand.

Cryptocurrencies have given the underworld ‘a life jacket of anonymity’, creating a double-edged sword of pros and cons to their wholesale implementation.

One way to disempower the criminals is for governments in the region to regulate cryptocurrencies. Yet this action could go even further by promotion, too.

Already such actions are taking place in Brazil. Late last summer the government issued a law where crypto transactions had to be reported to the Receita Federal, the Brazilian national revenue service with already effective results witnessed.

Bogotá has followed suit, moving to get Colombia’s blockchain and cryptocurrency infrastructure up to current standards.

South America is on course to get where it needs to be on its technological mission to ‘out-tech’ the techie nations in crypto use cases, though there is still a long way to go.

The late, great Chilean poet of hardcore Communist leanings, Pablo Neruda, once said:

‘Latin America is very fond of the word “hope.” We like to be called the “continent of hope.” Candidates for deputy, senator, president, call themselves “candidates of hope.” This hope is really something like a promise of heaven, an IOU whose payment is always being put off. It is put off until the next legislative campaign, until next year, until the next century.’

--Pablo Neruda

And maybe that’s the thing in Latin America, the ‘hope’, the imaginary future in front of you, the one you can’t have but want so very much. For it forms the people, the pueblo, the beating heart of a nation. And the heart wants change, needs change, sick of the beatdowns, the whippings, the discrimination, the ridicule.

That’s what cryptocurrencies and the blockchain can do for Latin America.