The population of Chile is turning to cryptocurrencies en masse, as the country experiences problems in its economy. Along with Argentina, another country that has seen a huge adoption of Bitcoin due to the crisisthe case may show that Latin America has seen sense in alternative currencies to its own central banks.
The country’s population had already been following the growth of technology in recent years. In 2019, for example, the Chilean Minister of Finance indicated that cryptocurrencies and fintech would soon be regulated.
In 2021, a Chilean senator announced that he bought Bitcoin for his retirement, indicating that the news reached the country’s political class.
Furthermore, a presidential candidate in the Chilean elections urged caution with Bitcoin, even as he acknowledged that mining would do well in the country.
Chileans Turn To Crypto As Economic Crisis Worsens
Even with the fall in the price of cryptocurrencies, the situation of the economy of some countries is even worse and more uncertain than the future of decentralized digital currencies.
According to Coindesk, who spoke with the CEO of a Chilean cryptocurrency exchange, there is a large increase in stablecoin trading volume, indicating that the local population operates from the Chilean peso (CLP).
After years of a stable economy, the local currency is beginning to lose strength, and in June the peso reached its lowest dollar rate in history. In addition, inflation shot up in Chile, indicating that the situation is serious.
In Q2 2022, exchange representatives told the report that there was at least a 50% increase in stablecoin trading, primarily USDC and USDT.
These currencies paired with USD simply do not exceed in volume the transactions of bitcoin and ethereumwhich continue to lead in the country.
Chile’s constitution could be amended for the first time since 1980
The last time the Chilean constitution was changed was in the 1980s, when the country was still under the dictatorial regime of Augusto Pinochet.
But in September 2022, the local population could approve a new constitution, which has created uncertainties in the local economy. In this way, many Chileans rushed to the banks to open international accounts, but the bureaucracy of these institutions leads many to cryptocurrencies, being a way to get out of the local currency.
It is worth remembering that the reality in Chile regarding cryptocurrencies is somewhat similar, with national exchanges pushing for regulations and various legal disputes against banks. Also, the local government is looking into launching a CBDC digital currency soon.