For the South American region, Blockchain technology could go a long way when it comes to consumers showing more faith in the banking sector, and the safety of personal savings in a region that has been plagued with distrust in the financial system. Blockchain’s distributed ledger will also ensure that consumer faith is built faith in property, and political processes, as well as protecting entrepreneurial pursuits in the region.
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While media outlets are generally more focused on how fintech startups and Blockchain will be assimilated in wealthier economies, a good number of Latin American populations, including businesses, and government agencies from Colombia to Argentina have begun to embrace Blockchain technology.
Blockchain’s Potential for Latin America
Decades of unstable local currencies across Latin America has forced consumers to find alternative ways to protect their bank savings from the rising consumer prices as well as currency control policies. For the wealthy, digital currencies have been used as a safeguard against the rampant inflation. A 1,000% rise in crypto transactions were reported in Venezuela. While a 450% rise was observed in Brazil. As for Argentina, Buenos Aires, the country’s capital has been ranked as one of the top 10 cities with a string Bitcoin (BTC) presence.
However, 70% of Latin America remains either unbanked or underbanked, due to a lack of access to the basic financial services. Blockchain-based fintech solutions should potentially provide financial alternatives to the benefit of this segment of the region’s population. This means that Blockchain-based platforms could help to increase financial inclusion. It can also empower the region’s consumer market thereby achieving sustainable growth.
Blockchain-based solutions could be the way forward when it comes to restoring the trust of citizens’ in public institutions, ultimately paving way to better political participation, which will result in a healthier democracy. In country’s facing persistent corruption and political upheaval, Blockchain-based government transactions could ensure transparency, and ultimately stop the issue of misappropriation of funds.
A Sizable Number of Latin American Governments are Experimenting With Blockchain Technology
Several Latin American governments have started experimenting with Blockchain-backed applications, testing these applications in the healthcare sector, national identity management systems, and banking services as well as internal revenue monitoring.
Apart from Venezuela’s controversial cryptocurrency, the Mexican government also announced plans to facilitate its first public procurement procedure backed by the Blockchain. The Brazilian authorities have looked to the Blockchain initiative as a way to curtail corruption and overhaul Brazil’s financial infrastructure.
Chile’s Ministry of Energy has started using Blockchain-based technology to verify and secure data recovery on the national energy grid, in a bid to restore consumer trust. The government of Colombia is looking to the Blockchain in a bid to improve security and prevent fraud.
Latin America Embracing the Blockchain Initiative
From the nation’s mentioned above, it is safe to say that a number of countries in Latin America, are proving themselves to be pioneers of Blockchain technology. While a number of wealthy economies remain wary of Blockchain, the eagerness of emerging Latin American economies probably stems from the possibilities that the Blockchain opens for their governments, consumers and entrepreneurs; Including a hedge against inflation, ensuring political transparency, facilitating broader financial inclusion and more efficient, and secure remittances.