Cryptocurrency in Colombia is positively thriving. The overwhelming majority of the population is familiar with Bitcoin and other crypto-assets.
The country now boasts a highly tech-savvy generation who are constantly on the lookout for new growth opportunities.
According to a survey by Bitcoin trading platform Paxful, 80% of Colombians are open to investing in cryptocurrency. Many young people are already used to trading digital coins. In fact, almost half of the people surveyed between 25 and 40 years old own cryptocurrencies or plan to buy some soon.
In 2019, Paxful alone has seen over $1 million in transactions from Colombian users.
Cryptocurrency in Colombia is popular
Many cryptocurrencies in South America are thriving as people look for alternative ways to counter inflation. This isn’t necessarily the case in Colombia however, since the inflation rate has been pretty stable this year. After surpassing the 7% milestone in 2016, the inflation rate has since come back down to lower values, recently reaching 3.42%.
While 3.42% may still seem high for stable economies, that’s a low rate for South America. So, inflation alone isn’t driving Colombian people towards cryptocurrencies.
Colombia’s case is different. The country has a recovering economy, and the population is open to new opportunities, such as cryptocurrency and fintech start-ups. In 2018, Bogotá ranked seventh in the list of top Bitcoin cities, with 87 active crypto businesses.
Colombian authorities haven’t provided a legal framework for the crypto ecosystem to fully develop yet, but the population continues to invest in digital assets.
The popularity of cryptocurrency in Colombia may also be a result of people’s reluctance to engage in traditional banking. As in most countries in Latin America, a significant part of the country’s population is “unbanked”. Many people don’t trust banks, don’t have a savings account, or simply prefer peer-to-peer alternatives for investing.
Blockchain technology is also becoming more popular, as more organisations begin to implement pilot projects. The Colombian government is taking a welcoming approach to technology, and local and central authorities are also ready to implement blockchain solutions to solve their problems.
Venezuelans in Colombia opt for cryptocurrency
Another factor that may have changed the cryptocurrency habits in Colombia comes from other countries on the continent.
Colombia has received almost 1.4 million Venezuelan refugees over the past few years. Refugees have significantly contributed to the adoption of cryptocurrency in Colombia.
Venezuelans come from a country facing a severe economic and humanitarian crisis. Its government has experimented with the oil-backed cryptocurrency Petro, and Bitcoin and Dash are being used as both stores of value and payment methods.
Many people from Venezuela are familiar with the benefits of using cryptocurrencies and they continue to use them even after reaching Colombia – for sending money back home, for example.
Preference for Bitcoin
South America seems to have developed a passion for Bitcoin, and Colombia is no exception. The Paxful report showed that 79% of locals preferred using Bitcoin to preserve their cash, followed by a great distance by Bytecoin, Ether, and other cryptocurrencies.
Why Bitcoin? Besides the fact that everyone has heard about it, another reason may be the wide acceptance of this digital currency. Bitcoin is already an accepted form of payment for online shopping at many businesses.
Moreover, many financial institutions and tech start-ups also rely on Bitcoin when developing crypto-products.
Bitcoin ATMs are thriving as well
People buy most cryptocurrency in Colombia either on peer-to-peer exchange platforms or directly from Bitcoin ATMs. As a general rule, the less they have to deal with third-party financial institutions, the better.
Among the most trusted cryptocurrency exchanges in Colombia are LocalBitcoins, Binance, and Kraken. Locals also seem to have a preference for platforms that allow users to buy cryptocurrency anonymously, such as Paxful or Coinmama.
Moreover, the Bitcoin ATM market has been growing. Colombia hosts 54 Bitcoin ATM installations spread across the entire country. The highest concentration of machines is in Bogotà, with 32 ATMs, and Medellin, where people have access to 11 devices.
Besides Bitcoin, most of the ATMs also sell Bitcoin Cash, Ether, Litecoin, Dash, Monero, Zcash, and Dogecoin. Colombia has the most Bitcoin ATMs out of any Latin American country and currently ranks ninth in the world for Bitcoin ATMs.
Final thoughts
Colombia is a country with an appetite for innovation and blockchain-driven progress. Cryptocurrency adoption is on the rise, as well as blockchain-based projects that are meant to boost growth in this recovering economy.
A massive majority of the population has heard about cryptocurrencies, and most people are open to investing in digital coins. Young people take the lead when it comes to cryptocurrency adoption, and the country offers considerable potential for crypto-related companies.
Disclaimer: The views and opinions expressed by the author should not be considered as financial advice. We do not give advice on financial products.