Mastercard research reports that about 43% of all remittances in the LATAM region are made with digital assets.

43% of Money Transfers in LATAM Made in Crypto

According to Mastercard research, the adoption rate of digital remittances in Latin America is growing strongly. In 2023, about 43% of all remittances in the region were made using digital assets.

The catalyst for residents’ growing interest in digital payments is the increasing availability of financial instruments. Mastercard analysts found that about 79% of LATAM residents have bank accounts or debit cards. Meanwhile, 88% of Latin Americans with bank accounts actively use mobile devices to transfer funds.

The report says that official remittances to Latin America totaled $146 billion in 2022, using licensed remittance platforms accounting for only about 5% of all transactions in the region. This low percentage is directly related to the cost of transfers. According to Mastercard analysts, the average cost of sending remittance to Latin America is 5.8% of the amount, and in poorer regions, it reaches 25.5%.

The high remittance fees make digital assets more popular in the region. MoneyGram and Stellar payment systems, which provide USDC transfers, and SBI Remit, which uses Ripple for money transfers, are very popular in Latin America. 

Notably, the global average utilization of digital assets for remittances is 52%. Latin America’s figure still needs to be higher, as the lack of regulatory clarity on cryptocurrencies and some tech challenges are preventing mass adoption of the technology in LATAM.

Latin America has one of the highest crypto adoption rates in the world. More than half of local crypto users prefer to use CEXs for fund transfers, most of which are done with BTC and stablecoins.

Author: Ana Bustos García
#Cryptocurrency #Finance #News