Latin America was at the front of the line for bitcoin adoption, and one of the big reasons was the region’s economic difficulties. You will be glad to know that this continent is also the first country in the world accepting bitcoin as a lawful tender, El Salvador. The fact is that various countries in the continent are making use of many approaches for regulating bitcoin. Some of these regulations are very friendly for bitcoin, while the others are pretty hostile. In this article, you will learn about the countries’ stances about bitcoin regarding taxation and other deliberations. Click this image below to start your bitcoin journey.
Classification of cryptocurrency in Latin America!
You might not be aware that most countries often classify digital currencies as the assets that can be traded, such as securities. The impressive thing is that El Salvador is the only country in this entire world which has classified bitcoin as legal tender. In the Latin America continent many countries are not levying capital gain taxes. It doesn’t matter that it is a digital currency or other assets. There are no taxes imposed which makes investing in these countries much more convenient and unique. These countries have made the mind of many companies by accepting their demands related to deregulation and lowering taxes. In simple words, the fact is that the countries often start adopting cryptocurrency, blockchain, and fintech companies to boost their economies.
When we talk about Latin America, Panama and Costa Rica have some amusing tax laws. It is why they are already famous for the offshore banking and headquarters of the various corporate companies. The extraditing laws of Panama are also beneficial for the people, making it one of the best places for people looking to keep their low profile.
What is the reason for the crypto adoption in Latin America?
Unstable economic conditions!
You need to know that Latin Americans use digital currencies to protect their wealth. It is because so many countries in this continent are experiencing economic difficulties. The rate of inflation is continuously growing, making the worth of the citizens significantly less. The increase in inflation and decreasing the government’s faith is the reason which is causing the countries to start accepting digital currencies. By storing their wealth in the blockchain, they can keep the value of their money. It doesn’t matter the condition of the country’s economy; when you store the value in digital currencies, it will not affect you in any way. There is no denying that the risks of bitcoin are very high, but still, it is a much better option to choose when your national currency value is decreasing.
Payments of bitcoin!
The economic condition of some countries in Latin America is not good, and people of these countries are now emigrating. They leave their families to work outside the countries with a substantial currency value. Here comes the new problem: they have to send their earnings to their families to support them. The transferring services are pretty expensive, and they comprise very high commissions. It can even take many days to send and receive the money. It is why those people are using bitcoin to make faster and safer transfers anytime and anywhere. We all know that bitcoin is one of the most notable mediums of exchange. You can make the transfers whenever you want without paying higher transaction fees.
Lack of access to banking!
As per records of the World bank, there is a minimum of 50 per cent of the population of Latin America who does not have any access to banking. It means that these people have no means of protecting their wealth. But there are more than 387.2 million people connected to the internet, which means that people have higher access to the internet than bank accounts. It is one of the reasons why people are now using bitcoin to store their funds safely, making transfers quickly and effortlessly.