Over the past decade, cryptocurrency has become one of the dominant financial tools worldwide. The fact that this has been achieved despite widespread criticism around its high volatility and lack of regulation surely makes the achievement seem more surprising. However, Latin America has become not only a bastion of cryptocurrency and blockchain technology but also a clear lesson on why this volatility and lack of regulation might be favorable.

According to a survey by MasterCard, over 50% of all Latin American consumers have already made transactions using cryptocurrencies. Furthermore, with the proliferation of crypto-related startups in the region, access to blockchain and cryptocurrencies have become more widespread than ever. This growth, in conjunction with the financial and economic environment of the region, has made crypto more attractive than foreign finance currencies.

When it comes to why Latin America has become a leader in crypto adoption, Argentina is one of the best examples you can get. According to official data, the nation's inflation rate for the first eight months of the year was 56.4%. This number is a direct consequence of the economic turmoil that the country has experienced for years, which has had an impact on everyday life. 

Argentina and its citizens are not unfamiliar with the current crisis, having experienced it back in 2021. Back then, citizens learned to rely on the US dollar to ensure their acquisitive power didn't diminish over time, a trend that they follow to this day. Unfortunately for them, the government has established a package of laws that prevent the common citizen from accessing dollars at the official rate, which is considerably lower than the unofficial. Those able to get dollars at that rate have to limit themselves to $250 per day.

Other measures limiting Argentinians' ability to operate in USD include a 75% taxation on any purchase that requires dollars. This means the payment of most digital services, imports, foreign payments, and plane tickets costs considerably more. While the unofficial dollar rate being worth more than double the official rate can help mitigate these taxes, accessing it efficiently and easily is becoming more difficult.

Here is where crypto enters the game. Cryptocurrency has become an easy and efficient way for people wanting to protect their money from inflation in the country by acquiring stablecoins. Volatile cryptocurrencies, on the other hand, allow them to generate gains in a country that has closed its financial borders. 

Companies like Satoshi Tango, Ripio, and Lemon Cash have quickly met the demand. However, these companies are headquartered in the country, which means that by reporting to the government, they could make transacting with crypto more difficult for its users. In addition, while other companies like Binance didn't report to the government at the time, Argentinians were worried about eventual compliance resulting in taxation issues and limits to their crypto transactions. 

This lack of trust in their government and centralized crypto institutions goes beyond Argentina, as it is rampant in Latin America. In a region with a history plagued by foreign intervention, coups, conflict, and corruption, centralization isn't seen with good eyes. Recent history has made people in the region look for decentralized alternatives that don't require them to trust any individual or corporation.

The Decentralized Finance (DeFi) boom of 2022 represented a unique opportunity for Latin Americans to gain control over their finances in a new way. DeFi allowed them to invest and save their cryptocurrencies without relying on a centralized platform and granted access to new tools like staking and collateralized borrowing. Unfortunately, the benefits of DeFi have remained hidden behind the barrier that these platforms' use difficulty possess.

This issue has been noted by crypto projects like Hubble Protocol, which aim to make it easier for people all around the world to interact with the DeFi ecosystem. While the fulfillment of this mission will benefit people everywhere, it will prove especially useful for people in Latin America. With one of the greatest skill gaps in the world, technical savviness in the region is extremely low, preventing access to advanced tools like DeFi.

In a podcast with Grit Daily's Sebastian Rusk, Hubble Protocol's co-founder and project lead Marius George Ciubotari referred to crypto's need to provide real solutions to everyday people:

"We are currently in a bear market which has made a lot of protocols struggle. It really makes you wonder, 'Have we found a product market? Are we addressing a real need, or is it just us trading with each other in this giant circular casino?' The challenge is to serve a real need which needs to be consistent, not just exists during the bull market."

While the Argentinian government's grip on its citizens' economic freedom as rumors of a new tax increase, Argentinians' devotion to cryptocurrencies is likely to increase, a trend that will surely be followed by countries in the region. With DeFi becoming increasingly popular and available to the Latin American market, governments would have an uphill and futile battle if they were to attempt to restrict access.