Changing the use of cryptocurrency in the Middle East and South America; A tool for survival, not for business

Chronic economic crises in countries such as Argentina and Iran have completely changed the function and concept of the digital currency market. Citizens of these regions no longer look at cryptocurrencies as a luxury tool to get rich overnight, but rather as a safe haven to maintain their purchasing power. New analytical reports show that a direct and significant correlation has been formed between the national inflation rate and the penetration rate of digital assets among the people of these societies.

According to Tekna, statistics indicate that in sick economies, the demand for stablecoins such as USDT and USDC has greatly increased and they have replaced fiat currencies. Instead of keeping the national currency, which is becoming worthless day by day, people prefer to convert their assets into digital dollar equivalents to avoid fluctuations. This change in financial behavior reflects a deep public distrust of governments’ monetary policies and an attempt to escape strict currency controls.

In Iran, the economic situation has unique complications due to the combination of rampant inflation and international banking sanctions. Iranian users use cryptocurrencies not only for saving and investing but also as a vital tool for cross-border financial transactions. Blocked access to the global banking system has made Bitcoin and other digital currencies play a key role in micro-businesses and money transfers.

The decentralized nature of blockchain technology is its main appeal to citizens caught up in command economies. Uncensored digital wallets are the only option left when governments print money indiscriminately or impose restrictions on bank accounts. This technology allows people to have full control of their assets independent of the decisions of politicians and central banks.

The rapid growth of crypto adoption in developing countries is a serious alarm for financial supervisory bodies. Although the government authorities try to prevent the outflow of capital by imposing restrictive and tax laws, the technical structure of the blockchain is highly resistant to financial filtering. It seems that until economic stability and security returns to these countries, digital currencies will continue to be the most popular and efficient defense shield for people against poverty.