According to a recent report by blockchain analytics company, “Chainalysis”, Latin America has a tendency towards centralized exchanges (CEXs) rather than decentralized exchanges (DEXs), compared to the rest of the world.
The report, published on October 11, stated that Latin America has the seventh largest cryptocurrency economy in the world, lagging behind the Middle East, North America, East Asia and Eastern Europe.
However, it indicates that Latin American cryptocurrency users strongly prefer to use centralized exchanges (CEXs):
Moreover, in some countries within the region, the distribution of cryptocurrency activity by Platform Type is significantly tilted towards centralized exchanges (CEXs) compared to the global average.
The global average of preferences related to cryptocurrency platforms is 48.1% for centralized exchanges (CEXs), 44% for decentralized exchanges (DEXs) and 5.9% for other decentralized finance activities (DeFi).
Nevertheless, the preference for centralized exchanges in Venezuela is much higher at 92.5%, while decentralized exchanges have a much lower preference at 5.6%.
The analysis highlighted that Venezuela has a unique reason for its growing adoption, as this is primarily attributed to a “complex humanitarian emergency”.
The report shows that in the midst of the covid-19 pandemic in 2020, cryptocurrencies played a pivotal role in directly helping healthcare professionals in the country.
Therefore, cryptocurrencies became necessary because traditional payments were difficult due to the government’s refusal to accept international aid, influenced by political reasons.
Colombia, on the other hand, shows a 74% preference for centralized exchanges, while decentralized exchanges account for only 21.1% of its preferences.
As for Argentina, it leads the cryptocurrency space in Latin America in terms of the huge volume of transactions, receiving an estimated 85.4 billion dollars during the twelve-month period ending July 1.
