Latam Insights: Cryptocurrency Developments in Latin America
This week on Latam Insights, we’re spotlighting key developments in the cryptocurrency landscape across Latin America. Significant happenings include El Salvador’s foray into gold to enhance its foreign reserves, a pivot to USDT for oil transactions in Venezuela, and the impending launch of Bolivia’s national central bank digital currency (CBDC).
El Salvador’s Gold Investment
El Salvador is making waves by reinvesting in gold, a strategy reminiscent of pre-1990s practices, as a way to buffer against economic instability. The country has recently acquired an impressive 13,999 troy ounces of gold, valued at around $50 million, aiming to diversify its reserves away from the U.S. dollar. According to the Central Bank of El Salvador, this purchase marks a pivotal shift in their asset management strategy, as President Bukele shifts focus from solely augmenting bitcoin in the nation’s reserves—currently standing at 6,292 BTC with a value of approximately $696 million. Consequently, El Salvador’s gold reserves now total 58,105 troy ounces, approximated at $207.4 million.
Venezuela’s Shift to USDT
Venezuela, amid its ongoing economic challenges, is increasingly relying on USDT, the leading stablecoin, for oil transactions. As the country navigates both internal economic hurdles and external sanctions, Venezuelan businesses are adopting USDT for crude oil sales, enabling more efficient operations and enhancing dollar liquidity for local markets. Economist Asdrubal Oliveros provided insight during a recent discussion, noting that Venezuela has increasingly shifted towards settlements in USDT, further developing methods to trade the stablecoin within its economic framework.
Bolivia’s Digital Boliviano
Additionally, Bolivia is poised to join the digital currency revolution with the anticipated rollout of its digital boliviano—a CBDC backed by the government. Although the launch, initially expected in August, faced unforeseen delays, the Central Bank of Bolivia has reassured the public that the digital currency will be unveiled this month. This move is part of a broader trend among Latin American nations eager to integrate digital assets into their financial systems.
Stay tuned for more updates as Latin America continues to navigate the evolving world of cryptocurrency.
