As per a report from blockchain analytics company Chainalysis, Latin American cryptocurrency users exhibit a distinct preference for centralized exchanges (CEXs) over decentralized exchanges (DEXs) compared to the global trend. The report, published on October 11, reveals that Latin America boasts the world’s seventh-largest cryptocurrency economy, lagging behind regions such as the Middle East and North America (MENA), Eastern Asia, and Eastern Europe.
However, the report notes that cryptocurrency users in Latin America exhibit a strong inclination toward using CEXs. It states, “Latin America shows the highest preference for centralized exchanges of any region we study, and leans slightly away from institutional activity compared to other regions.” Additionally, certain countries in the region exhibit a significant bias toward CEXs compared to the global average for crypto platform preferences.
Globally, the average preference for crypto platforms stands at 48.1% for CEXs, 44% for DEXs, and 5.9% for other decentralized finance (DeFi) activities.
In contrast, in Venezuela, the preference for CEXs is notably higher at 92.5%, while DEXs garner a much lower preference of 5.6%. Chainalysis points out that Venezuela’s adoption of cryptocurrency is influenced by the unique circumstances of a “complex humanitarian emergency.” The report explains that during the COVID-19 pandemic in 2020, crypto played a crucial role in directly aiding healthcare professionals in the country. Traditional payments were challenging due to the government’s refusal to accept international aid, driven by political considerations.
Colombia exhibits a 74% preference for CEXs, with DEXs representing just 21.1% of their preferences. In terms of cryptocurrency transaction volume in Latin America, Argentina leads, having received an estimated $85.4 billion during the 12-month period ending on July 1.
Furthermore, the report highlights that three Latin American countries secured positions in the top 20 ranks on Chainalysis’ Global Crypto Adoption Index. Brazil ranks ninth, with Argentina at 15th and Mexico at 16th. India occupies the top position on the index, followed by Nigeria and Vietnam in second and third, respectively.