Latin America makes its inclination clear towards digital finance in terms of stablecoins, as it helps boost financial interoperability and Web3, benefiting fintech companies and developers.
Stablecoins and tokenized data on open blockchains are enabling a new type of international trade by simplifying the act of transporting, storing, and owning value globally for individuals and businesses. In 2022, for example, international stablecoin settlement exceeded $7 trillion, compared to $14 trillion settled by Visa and Mastercard.
There are speculations that soon, many businesses and individuals may change their focus away from traditional financial solutions and toward certified and blockchain-based ones. Latin America appears to be taking center stage worldwide in this regard. Globally, there are 1.7 billion people who do not have access to banks but do have mobile phones. This will also be a compelling justification for the change.
It is anticipated that enormous sums of money will move toward financial solutions focused on blockchain technology. The digital aspect will displace traditional financial methods.
Latin America appears to be ahead of the curve in terms of digital money and financial technology adoption. One possible reason for this could be the limited access that many people have to analog financial solutions. Furthermore, the region’s demographics and total population contribute to these other characteristics, as they are more youthful.
It also has a robust developer foundation. It consists of a million developers coming from American companies and is influencing the local scenario, leading to the mushrooming of fintechs and new banks that can lower costs and increase accessibility to Latin America’s financial space. Fintech has the backing of policymakers.
Latin America has a well-defined market necessity, as well as policy support and significant dollar usage. As can be seen, stablecoins are gravitating toward the purchasing power of the region’s customers. Various countries are scouring Central Bank Digital Currencies (CBDCs).
There are currently fintechs, traditional banks, stablecoins, and CBDCs. The future will see continuous value exchange and the need for an additional framework. This will aid in integrating various layers and developing financial interoperability in Latin America and around the world.