Why crypto payments are the biggest trend in Latin America

Over the past year, the adoption of cryptography has skyrocketed in Latin America. Unlike most regions, however, the population of LATAM is driven more by the promise of “economic freedom” rather than by speculative features.

Recent developments such as expanding Binance Pay in Brazil and applying for a business license in Argentina have strengthened this trend. In a conversation with Beincrypto, representatives from Coinflip, Bitcoin Argentina and Paybis discussed how the volatile economic situation has driven the rapid growth of crypto payments in the region.

Binance Pay and Mercado Pago lead with LATAM

May was a bustling month to expand crypto services in Latin America. Over the weekend, Mercado Pago, the region’s largest online payments platform, announced an application for a fully digital banking license from the Argentina central bank.

This license allows for a wider range of traditional financial services, including more sophisticated investment tools, credit lines and fully regulated accounts.

The move signifies a critical step in Mercado Pago’s deeper integration into another major Latin American market, based on its established operations in Brazil, Mexico and Chile.

Mercado Pago already offers crypto payment services to clients in countries with existing businesses, but obtaining a banking license in Argentina can promote similar services within a more comprehensive and regulated banking framework.

Meanwhile, Binance Pay has recently been integrated with Pix, Brazil’s widely used instant payment system. This direct connection allows Binance users to instantly convert over 100 cryptocurrencies to Brazilian Reais for seamless payments or transfers.

Both developments confirm a significant shift towards Latin American crypto as users seek alternative financial experience beyond traditional systems.

Why is cryptography popular in developing countries?

Unlike users in developed countries who can experiment with cryptography, individuals in developing countries often rely on practical utility to achieve greater financial stability.

“Many people in this region don’t just experiment with crypto. They need it. Whether they avoid devaluing currency or sending money across borders quickly and without an infinite intermediary, Crypto has real utility here.”

Data collected by Paybis backs up why demand reflects the need.

“Inflation Hit Argentina has fostered a grassroots stable coin economy that currently supports everyday commerce and savings. Mexico is leveraging crypto to reduce mission costs. Konstantins Vasilenko, co-founder and chief executive development officer of Paybis, has even smaller markets, including Uruguay’s high average ticket size ($246).

But drivers that are deeper than merely economic needs enforce these users. It is a fierce pursuit of financial empowerment.

Erosion Trust refuels digital alternatives

The spread of cryptography in Latin America reflects a deep seated desire to grab control and experiment with alternative financial pathways.

“Many traditional financial institutions in Latin America have no long track record of stability or fully serving the population. They talk about decades of inflation, bank closures, capital management and a lack of investment-ready markets.

As the region continues to face these financial challenges, crypto payments will increasingly provide evacuation.

Continuous battle with the centralized system

Bitcoin Argentina president Manuel Ferrari frequently uses crypto payments to promote transfers. In doing so, he avoids the troublesome processes of the Argentine traditional financial system.

“I was in Brazil recently and have significantly reduced the tax burden that the Argentine government would have imposed if I had used the traditional financial system,” Ferrari told Beincrypto, saying, “I experience this on a regular basis too. My son studies abroad.

Ferrari added that traditional financial systems often take a reactive approach to crypto payments. If you consider cryptography as a threat, they often create hurdles to complicate their use.

“I believe this situation will continue. It’s unlikely that states will cut taxes on traditional financial transfers. On the contrary, they will probably try to tax and regulate all blockchain-based payments, crypto and ultimately Bitcoin. This is why I think the centralized market will become increasingly taxed and regulated,” he said.

As demand rises, traditional financial systems face choices of sinking or floating.

Will traditional banks adapt to the rise of crypto?

Traditional banks often impose strict requirements in countries facing significant economic disparities and inequality, such as large documents and high operating fees.

These factors are exacerbated by the lack of physical branches in areas that are difficult to access. As a result, millions of people are effectively excluded from basic financial services.

With the increasing acceptance of cryptocurrency, traditional systems need to adapt.

“I think it’s pushing traditional institutions to inspire innovation or get left behind. When millions of people trade peer-to-peer without stepping into the bank, it’s a wake-up call. We’re seeing partnerships between fintech and banks, and more hybrid models that blend traditional finance with blockade rails.

Traditional institutions in countries with high demand for crypto must adapt even faster. Some have already begun making the necessary changes.

“The Brazilian central bank estimates that 90% of the on-chain value flowing through the country is currently linked to stubcoin as a payment option. Mainstream institutions facing that reality are moving rapidly. Vasilenko told beincrypto.

In the meantime, the momentum for crypto payment integration in Latin America has shown no indication of a halt.

The reason it is the biggest trend in Latin America was that it first appeared on Beincrypto.