Kaiko, a leading cryptocurrency market data analytics firm, has found that cryptocurrency users in Latin America prefer stablecoins over bitcoin. In its most recent Latam market report, issued in June, Kaiko determined that 40% of the trading volumes involved Tether’s USDT. This preference exists even though Bitcoin’s proposition includes protection against the currency debasement processes common to some countries in the region.
Kaiko: Latam Cryptocurrency Trading Is Dominated by Stablecoins
Kaiko, one of the largest cryptocurrency market research and analytics firms, has discovered the preference of Latam crypto markets for stablecoins. The firm recently released its most recent Latam market report, which scrutinizes the behavior of Latam markets taking its trading tendencies into account.
The report analyzed data from seven cryptocurrency exchanges offering trading pairs including currencies from Latam countries: Kucoin, Binance, Mercado Bitcoin, Bitso, Htx, Okx, and Bitfinex.
Kaiko found that the region prefers stablecoins over bitcoin, a trend they mentioned surged in 2021. The report declares that 40% of the region’s trades include USDT, the largest stablecoin in the cryptocurrency market. In the same way, nearly half of trades involving the Brazilian real also include stablecoins, which Kaiko explains is due to the instability of the Brazilian currency and inflation in the region.
The popularity of dollar-pegged stablecoins in the region is particular to Kaiko, given that the narrative around bitcoin includes a currency debasing protection and inflation hedging use case that has still to penetrate Latam audiences. On three of the seven exchanges in the report, stablecoins were the most traded instruments. Bitcoin volumes surpass stablecoins only on Mercado Bitcoin, an exchange that handles almost 10% of the region’s volumes.
Binance, which trades almost 50% of the cryptocurrency in the region, also presents a high preference for stablecoins. In addition, stablecoin-to-fiat trading pairs accounted for 63% of the top ten trade volume. Kaiko states this drive for stablecoins has talked central banks into considering central bank digital currencies (CBDC) as an alternative, but it “remains uncertain if they can compete effectively.”
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Source: Bitcoin
