Latin American Crypto Markets Favor Stablecoins Over Bitcoin, Kaiko Research Reveals

Stablecoins have overtaken Bitcoin in popularity among Latin American crypto users, according to a new report from research firm, Kaiko. This trend, observed across seven major exchanges, highlights a growing preference for stable digital assets in the region.

These crypto exchanges offer trading pairs with Latin American fiat currencies, with stablecoins emerging as three of the most traded assets on three of those platforms, according to Kaiko’s research. Notably, Binance handles nearly half of the crypto transactions in Latin America, with available data showing users prefer transacting in stablecoins.

Meanwhile, stablecoin-to-fiat pairs accounted for 63% of the top ten trading volumes across the seven listed crypto platforms. Kaiko’s research also revealed that 40% of crypto trading volumes in Latin America involve Tether (USDT), suggesting that despite Bitcoin’s appeal as a hedge against currency debasement, stablecoins remain the preferred choice for many crypto users in the region.

Specifically, Kaiko noted that the stablecoin surge in Latin America began around 2021. The research firm also highlighted that the instability in the Brazilian economy and rising inflation have fueled increased stablecoin adoption in the country. According to Kaiko, nearly half of the crypto trades in Brazil involve stablecoins.

Comparing stablecoin and Bitcoin volumes, the report revealed that BTC trade volumes only surpassed stablecoins on Mercado Bitcoin, which handles almost 10% of the trade volume in the entire region.

According to Kaiko, following the increasing stablecoin traction in Latin America, Central Banks in the region are considering introducing Central Bank Digital Currencies (CBDCs) as an alternative. However, there are concerns about whether such Central Bank-issued assets can effectively compete with their decentralized counterparts.