Venezuela, is among the first nations to be included in Latam to be classified as “crypto-friendly” according to certain standards, is ranked third in the adoption rate according to a study published from the United Nations. The report, released this month, states the cryptocurrency market has expanded by 2,300% in the period between June 2019 and September 2021 and that the covid-19 pandemic was one of the primary factors behind this increase.
The report released from the United Nations Conference on Trade and Development has concluded that Venezuela is third in the countries that have the highest cryptocurrency adoption, second only to Russia as well as Ukraine. This report examines the reasons for the rise in cryptocurrency and how to regulate it revealed that 10.3 percent of the population in Venezuela were a cryptocurrency user.
Russians came 2nd on the list with 11.9 percent of the population using crypto. Ukraine came first with 12.7 percent of its population having some form of crypto. This could be explained by the economic challenges these countries are in and the volatility the currencies of these countries are experiencing because of conflict.
The report also shows that the developing countries have shown more openness to the idea of cryptocurrency. Of the top 20 countries to have the most adoption, 15 qualify as developing nations under United Nations standards.
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.
Another reason for the growth is with the belief that citizens of these countries are convinced about cryptocurrency as an instrument to protect their savings. This is why countries such as Argentina or Venezuela which are experiencing tough inflationary times have been ranked highly in reports of adoption of crypto.
The growth has also led to government response to a regulatory issue in the field. Venezuela currently has a transparent legal framework for cryptocurrency, which recognizes cryptocurrency mining and bitcoin as legitimate activities. Russia along with Ukraine are working on setting clear rules regarding the use of crypto.