The interest and adoption of cryptocurrencies have been on the surge globally. The growing consumer interest in the space has also led to many countries passing regulations to offer more clarity around cryptocurrencies. While the interest continues to grow globally among consumers, Latin America has experienced impressive levels of crypto adoption over the last few years.
The high level of crypto penetration in Latin America can be attributed to the growing inflation levels, the lack of penetration of traditional banking services, and political instability. All of these factors have created the perfect environment that promotes the adoption of cryptocurrencies in the region. Notably, the growing adoption has also resulted in the widespread usage of digital currencies.
According to PayNXT360 estimates, about 22% of Latin Americans have made at least one transaction with cryptocurrencies. This shows that a growing number of consumers are not only interested in investing in cryptocurrencies but also using their investments to make purchases and merchant transactions. This consumer behavior is driving the momentum for crypto-linked prepaid cards in Latin America.
In 2022, many cryptocurrency exchanges, both global and regional, have launched crypto-linked prepaid cards in Latin America. These launches are part of their strategy to leverage the growing popularity of altcoins among consumers by offering them an easier way to spend their cryptocurrencies and drive growth in the region. For instance,
Along with global cryptocurrency exchanges, regional players have also joined the crypto-linked prepaid card bandwagon in Latin America. For instance,
With several crypto-linked prepaid card programs currently live in the Latin American region and other value-added services running locally, Visa is leading the space in delivering more access and value to the crypto ecosystem in Latin America. For instance,
From the short to medium-term perspective, Visa is planning to further expand its crypto cashback prepaid card offering across the Latin American region, including in Mexico, Colombia, and Peru. As Visa intends to build on crypto schemes in the region, PayNXT360 expects more such crypto-linked prepaid card launches over the next three to four years. This will also allow the firm to manage the fast-evolving NFT ecosystem in Latin America.
Notably, these crypto-linked prepaid card launches from exchanges and payment providers highlight an effort to normalize the use of cryptocurrencies by using card networks in a way similar to international transactions where both parties use or receive the currency of their choice. PayNXT360 believes that these moves, which involve the usage of prepaid cards as a medium to move cryptocurrencies, are crucial for the growth of the sector, as cryptocurrencies move from speculatory investing into an everyday payment tool that complements cash, credit, and debit.
To know more and gain a deeper understanding of the prepaid card market in Latin America, click here.