A new survey reveals that cryptocurrency adoption will accelerate rapidly over the next year in Latin America. The trend marks a notable increase throughout Latin America, including Costa Rica, where although cryptocurrencies are not regulated by the Central Bank, they are legal and recognized as a legitimate means of payment. Likewise, the country is ranked 75th in the world according to the 2020 Global Crypto Adoption Index by Chainalysis.
The Central American country has adopted blockchain technology and cryptocurrencies extremely quickly and has a dynamic ecosystem as a result. The country has become a crypto hub due to the high demand among businesses to incorporate the technology into their system and accept it as payment. The country has hosted several events such as Tico Blockchain and EOS Surf, led by the EOS Costa Rica block producer.
In addition, the country has a stable and reliable Internet connection and is one of the largest renewable energy outlets in the world. More than 98% of its energy is renewable, making it one of the “greenest” on Earth and an attractive location for mining projects.
Legal but not official, say Costa Ricans
According to the survey, Costa Ricans feel comfortable with cryptocurrencies, but they disagree with adopting one as an official currency, as is the case in El Salvador with bitcoin. In this regard, one in three people does not support the idea, 43% are ambivalent and 24% believe that this would be a good measure for the Costa Rican government.
The key players in Latin America
According to the results of the research, the country that leads the list with the most people looking to buy cryptocurrencies in 2022 is Brazil, where 25% of the population is expected to enter the world of crypto assets -which is equivalent to 36 million Brazilians-.
It is followed by Colombia, where 22.3% of those surveyed have expectations of buying digital currencies or tokens in the coming year, which represents an increase of 208% if one takes into account that currently, only 5.2% of Colombians have cryptocurrencies.
“Our survey has revealed that Latin America is poised to experience a huge uptick in digital currency uptake in several countries in the region,” says Patrick O’Neill, Managing Partner of Sherlock Communications.
“Clearly there is a lot of interest in cryptocurrencies,” explains O’Neill, “however, the survey also reflects that participants face concerns about cybersecurity regarding exchanges and tokens, as well as frustration with the availability of analytics. independent and educational resources on this emerging area for investments.
Another fast-growing market is Mexico, where a 345% increase in adoption is expected (from 3.8% to 16.9%). While Argentina reports a 235% increase in the adoption rate (from 5.5% to 18.4%).
Meanwhile, 16% of Chileans surveyed responded that they plan to buy digital currencies in the next 12 months (an increase of 208% from the 5.2% currently reported).
Lack of financial education is a challenge
‘Lack of understanding of how this technology works’ and ‘I need to have better knowledge on how to buy or invest in cryptocurrencies’ were the two main reasons that respondents expressed as obstacles to putting into practice their desire to acquire digital assets. Across these 6 countries, more than half of respondents gave at least one of these reasons as holding them back from buying crypto in the next 12 months.
The lack of education about cryptocurrencies was also supported by another of the report’s main findings: a large proportion of respondents across all countries stated that they have “never heard of blockchain” – it was higher in Argentina with 89.2% saying who had never heard the term, although it had high levels throughout the region: 85% in Peru, almost 80% in Chile and Mexico, 77% in Colombia and 68% in Brazil.
“The lack of knowledge about blockchain technology, which creates the ability to exchange currencies without intermediaries using decentralized and immutable digital ledgers that are the foundation of all cryptocurrencies, suggests that many respondents’ understanding of this area is rather shallow”, saysLuizHadad, a consultant specializing in blockchain at Sherlock Communications.
“As much as this report shows us that Latin Americans believe that cryptocurrencies and web3 will play an important role in their financial future, it also reveals that there is a large knowledge gap that frustrates the desire of many people to take the first step towards the digital economy (crypto space or crypto world),” Hadad commented.
This lack of understanding about the complexities around blockchain technology and cryptocurrencies is one of the reasons why Sherlock Communications has launched the 2022 Blockchain Report – Latin America e-book, which develops the current state of blockchain in the countries of the region. .
The report takes a look at the recent regulations affecting the adoption of the blockchain ecosystem in the region. It is also an excellent source of updated information on topics such as regulatory frameworks and taxes, the panorama of the main players, adoption rates and more specific data for each country. The report was designed to provide a solid perspective for both people who have experience in the area, as well as those who are taking their first steps.