The Caribbean renaissance reflects growing adoption in Argentina, Brazil and Venezuela

After the fall of FTX, the Caribbean cryptocurrency landscape entered a phase of doubt and decreased engagement, leading to a loss of confidence in crypto platforms. However, as of late 2023, there has been a notable revival of these activities across the region.

Prominent blockchain analytics firm Chainalysis said users in the region are increasingly favoring centralized exchanges (CEXs) known as Coinbase and Binance.

The resurgence of cryptographic activity in the Caribbean

The latest edition of Chainalysis’ Cryptocurrency Geography Report 2024, shared with CryptoPotato, highlighted a significant increase in foreign clients establishing legal entities in the Web3 and blockchain sectors in the Cayman Islands, in particular over the last year

These companies typically include layer 1 and layer 2 solutions and span a variety of uses, including artificial intelligence (AI), cross-chain infrastructure, gaming, and cloud/data storage. This was revealed by David Templeman, who is a specialist financial investigator at the Cayman Islands Financial Investigation Office.

“The fallout from the various collapses (FTX, TerraUSD/Luna, Celsius Network and Three Arrows Capital) has put pressure on the industry to learn from mistakes and establish better oversight and guardrails. There is a strong community of blockchain and Web3 companies in the Islands both physically present and legally domiciled here”.

Chainalysis believes this resurgence of crypto activity in the Caribbean could cement the sub-region as a key hub for adoption going forward.

Overall, Latin America is the second fastest growing region for cryptocurrency adoption, with a year-over-year (YoY) growth rate of around 42.5%. Chainalysis found that the most used service among Latin Americans is centralized exchanges (CEX), used by 68.7% of users, slightly below the rate in North America.

Institutional and professional investors, especially those transacting above $10,000, primarily drive the region’s transaction value.

The cryptographic renaissance of Latin America

Argentina leads with an estimated value of cryptocurrency received at $91.1 billion, slightly ahead of Brazil at approximately $90.3 billion. Argentina is the leader in the stablecoin market in Latin America, representing 61.8% of the volume of stablecoin transactions. This figure also exceeds Brazil’s share of 59.8% and is significantly higher than the global average of 44.7%.

Meanwhile, Brazil’s institutional crypto activities reflect renewed interest from major financial players, as the monthly value of transactions exceeding $1 million increased by approximately 29.2% between the last two quarters of 2023 and around 48.4% from the fourth quarter of 2023 to the first quarter of 2024.

In addition, Venezuela has slowly become one of the fastest growing crypto markets in Latin America, with year-on-year growth of 110%, which far exceeds that of any other country in the region, despite the uncertainties surrounding the Maduro’s regime.

Interestingly, DeFi is another aspect of cryptocurrency growth in Venezuela. While centralized services have dominated the value received since 2022, there has been growing interest in DeFi, particularly noticeable in late 2023.

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