Venezuela, one of the first countries in Latam to be considered “crypto-friendly” by some standards, has ranked third in adoption rates, according to a report issued by the United Nations. The report, issued last month, states that the cryptocurrency ecosystem has grown by 2,300% between September 2019 and June 2021, and that the Covid-19 pandemic was one of the main catalysts for this growth.
Russians were second on the list, with 11.9% of the population holding crypto, while Ukraine ranked first, with 12.7% of its citizens holding some kind of crypto. This can be explained by the economic situations these countries are facing and the swings their currencies are experiencing due to conflict.
The report also shows that developing countries have been more receptive to the cryptocurrency proposition. Of the first 20 countries with the most adoption, 15 are qualified as developing countries under United Nations standards.
The study also tries to explain the reasons that have made crypto grow so much in these developing countries. The document notes that the Covid-19 pandemic played an important part in the adoption of crypto. It states:
The use of cryptocurrencies was an attractive channel, in terms of price and speed, through which to send remittances. During the pandemic, the already high costs of traditional remittance services rose even higher during lockdown periods due to related disruptions.
This expansion has also fueled a regulatory response from governments in the area. Venezuela already has a fairly clear cryptocurrency legal framework, that establishes bitcoin and crypto mining as legal activities. Russia and Ukraine are in the process of also establishing clear rules for the use of crypto.
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