In recent years, some parts of Latin America has experienced certain challenges both politically and economically with a lot of issues damaging the financial sector. Many citizens, investors, and business people are finding it increasingly difficult to perform transactions with physical currency.
Even with the availability of the internet, keeping one's data secure is proving to be just as difficult because of the rampant instances of hacking and phishing. And as they say, "desperate times call for desperate measures." But in this case, it's a need for a secure system to maintain finances.
What does Blockchain mean for Latin America?
Blockchains are essentially encrypted ledgers for business transactions with Bitcoin and the like. it's very secure and can be accessed at the push of a keyboard. Ever since cryptocurrency's introduction in the late 2000s and its meteoric rise in the 2010s, major countries quickly adopted the technology and implemented it into their systems.
In Latin America, Blockchain is a technological breakthrough. This serves as the best alternative to domestic currencies addressing inflationary spiral and a mechanism to draw on financial inclusion of the historically unbanked. Blockchain bypasses excessive crossborder transaction fees for domestic or international remittances when sending money from one country to another. This technology is very beneficial for people who lack access to traditional banks and financial systems.
Blockchain’s big potential for Latin America
Latin America views cryptocurrency and blockchains as a major boon that would solve a lot of their current issues regarding information technology, particularly with privacy and security. One of the more noteworthy countries in recent years that wanted to adopt cryptocurrency is Venezuela.
Venezuela's hyperinflation has been a big problem for many years, and investors have become extremely cautious when dealing with the country. Venezuela has launched its own cryptocurrency, the Petro. Despite its initial skepticism (cryptocurrency, in general, is capable of disrupting the public and private sector ), others saw some potential in the country's adoption with cryptocurrency.
Argentina is also another example of a party interested in cryptocurrency. Argentina may have issues of their own, but they proudly claim to have ecosystems that are ideal for cryptocurrency startups to set up shop and begin investing in the country. With one company raising millions of US dollars in a single year. In 2017, Brazil as among the “hot” countries in the world to invest and exchange Bitcoin.
Colombia has already started testing blockchain-based technologies and software, implementing them in areas outside of bank services and revenue monitoring. They found out that they have their uses in the healthcare field. The encrypted and layered nature of blockchain has made data security and management easier. Even the Colombian government is looking at blockchain technologies in hopes to improve security and prevent fraud.
Chile utilized the blockchain to improve its data security for energy services. Their reasoning is that by strengthening security, their customers would feel more confident and trusting in their electrical providers again. And by repairing any damages, public trust will improve and then the investors would follow.
Several countries across Latin America are proving themselves pioneers in blockchain technology. The eagerness of these emerging Latin countries stems from the remarkable possibilities that blockchain opens up for their governments, entrepreneurs, and the public. Latin America is indeed poised to take full advantage of the technology, with several entrepreneurs and startups already creating world-class solutions to unlock the region’s true potential.