Furthermore, the swift developments in crypto and digital assets have been sparking start-ups in the region. Last year, the value of crypto firms in Latin America increased almost tenfold from $68 million to $650 million. However, due to their volatility and the potential for criminal use, caution abounds over the proliferation of digital assets. For instance, the recent price falls in cryptocurrency values is being greatly felt by some countries in Latin America, with El Salvador having reportedly lost almost $40 million with crypto since the September 2021 adoption.

Overview of blockchain in some Latin American countries 

• Argentina 

Due to the instability of the peso - the basic monetary unit of several Latin American countries which is experiencing year-over-year inflation of over 55% - there is need for an alternative. Cryptocurrency, by providing better chances, appeals to the Argentines who had once been looking to keep their assets in dollars or euros. In 2021, the crypto flow in Argentina reached $103 billion. There was a 340% rise in the number of companies paying their employees partly in crypto, thereby making Argentina the country with the highest percentage of crypto-paid workers. However, as crypto has grown in popularity the mining process has become more expensive, with local governments having raised energy taxes due to mining being highly energy-consuming. The country is also hesitating on introducing major cryptocurrency regulations due to the central bank expressing concerns about crypto's vulnerabilities despite growing adoption. 

• Brazil

Brazil, being Latin America’s largest economy, has been valued at $27.6 billion per year as of April 2022. The first cryptocurrency unicorn in Latin America, Mercado Bitcoin, is based in Brazil and its valuation increased to over $2 billion in 2021. According to the 2022 Global State of Crypto Report, Brazil, followed by Venezuela, has the highest percentage of its population owning crypto in Latin America and Brazil’s Congress has been planning to develop a regulatory framework. On April 26th 2022, the Brazilian Senate passed a bill governing virtual assets. The bill comprises of provisions that both define virtual assets and create rules for day-to-day usage. It also puts in place penalties for fraud.

• Cuba

Cuba has only recently rolled out internet connection for mobile phone users and already has about 100,000 citizens using some form of cryptocurrency. Compared to the 11 million citizens living in the country, this is not so high - however, this is only within a few months. Virtual currencies are popular in Cuba for remittance payments but, in November 2020, the then-US president banned the use of Western Union, which was the main company facilitating remittances to Cuba. In April 2022, after having allowed crypto for personal use in 2021, Cuba’s central bank approved licensing of some cryptocurrency service providers. Due to cryptocurrency’s anonymity and independence from national or multinational oversight, US restrictions could be boycotted. Venezuelans and Nicaraguans have likewise enlisted cryptocurrency to circumvent US sanctions.

• El Salvador

El Salvador is the first country to adopt Bitcoin as an official legal tender. President Nayib Bukele framed his country as a pioneer and launched a state-sponsored crypto wallet, a utopic Bitcoin city, and volcano-powered crypto mines. President Bukele hoped citizens and businesses would adopt Bitcoin for everyday transactions and remittance payments. Meanwhile, rating agencies and the IMF warned against the adoption of Bitcoin due to its instability and vulnerability to financial crimes. The recent Bitcoin crash has added to losses totalling $40 million, exceeding the $38 million El Salvador had to pay to bondholders in June. Crypto adoption by businesses runs low and technical barriers to its usage increases. In an attempt to stabilise the price of Bitcoin, President Bukele has dipped into state coffers, buying over $105 million of the currency. 

• Panama

A bill regulating eight cryptocurrencies was recently passed in Congress. The cryptocurrencies involved are Algorand, Bitcoin, Elrond, Ethereum, IOTA, Litecoin, XRP Stellar and XDC Network. This would permit Panamanians to use any of these currencies in private businesses and for civil matters. Worries that crypto could be used for money laundering exist, as illegal financial activity is a problem Panama has struggled with in the past. However, Panamanian lawmakers have assured that crypto will be regulated and overseen by a watchdog and that transactions will be subject to the country’s existing laws on financial transparency.

Source: Newday Crypto

Blockchain transforming remittance in Latin America 

According to data from Americas Market Intelligence (AMI), the volume of remittances received in Latin America rose to 126 billion dollars in 2021, more than twice the amount it was a decade earlier. Sending money across borders, unfortunately, has very high fees in the market with Brazil topping the chart, having an average fee of 7% per transaction. Peru, the Dominican Republic and Colombia closely follow. Digitalisation among remittances industry players, however, has been reported to be helpful, as it would open the door to blockchain technology, allowing money to be sent with zero fees. This mechanism would be of benefit to a poorly banked and more digital population.

Average remittance fees in Latin America

Source: Americas Market Intelligence

Although traditional banking has improved the traceability of its transactions, the mechanism is still expensive due to the need for interbank arrangements. Brokerage is usually excessive, particularly for those currencies that are not often exchanged. It is difficult for many traditional players to achieve optimised costs and rapidity at the same time. However, blockchain, striking out the need for any intermediaries, allows for a single point of exchange, thereby making possible a cheap, easy and fast transaction. At the beginning of this year, about 76% of consumers in Latin America had a smartphone, as against 69% who had a bank account. This shows a possibility of consumers skipping conventional banking and adopting a cryptocurrency wallet as it provides relatively better services. Asides from the highly volatile cryptocurrencies like Bitcoin and Ethereum, blockchain offers low risk stablecoins (examples are USDC and USDT) that are bolstered by fiduciary currency such as the US dollar. These stablecoins or stable cryptocurrencies are alternatives that could evade the scepticism of investors or users of remittance. The swift developments and adoption of the use of cryptos and digital assets have sparked numerous start-ups in Latin America. However, although the region is at the forefront in its use of cryptocurrencies many governments are taking a cautious stance toward cryptos

• Europe 1.4million 

• China 1.2million 

• USA 295 000 

Environmentalists, such as Greta Thunberg, have always highlighted the dangers of climate change and Thunberg did this again at Glastonbury where she spoke about “governments creating loopholes to protect firms whose emissions cause climate change.  These firms are not the only ones that cause climate change. A quarter of the C02 that is emitted into the atmosphere can be linked to transportation, and a good percentage of world transportation revolves around road transport i.e., cars”. The BBC highlights, too, that “cars, buses and motorbikes - account for nearly three-quarters of the greenhouse gas emissions that come from transport.” But at this point in civilisation, is it impossible to do without cars since they are a fundamental aspect of our everyday lives? Indeed, some governments and organisations have envisioned a new way of riding without ‘poking’ at the earth. The idea of electric vehicles (EVs) has come to life and the industry is constantly morphing to remain true to its objectives. EVs are out to replace the internal combustion engines in the strive to reduce emission of carbon monoxide, hydrocarbons, nitrogen oxide, etc.

Electric car sales 2010 to 2021 globally

Source: IEA

Markets and Markets project that the global EV industry is expected to rise from 8.151million vehicles to 39.208million vehicles from 2022 to 2030, which equates to a CAGR of 21.7%. On the list of things driving the industry forward is governmental support through tax rebates and subsidies (compelling manufacturers to make EVs) and increased demand for low-emission vehicles. Unsurprisingly, the EV industry comes with its challenges but blockchain technology has found its place as a solution to some of these problems, including:

• vehicle verification

The growth of the industry creates an inner market for the sales of used EVs. Before buyers decide to purchase a used EV, there is a plethora of information required to be completed such as safety devices in the car, miles clocked, servicing information, etc. Blockchain can be used to create, in effect, a digital ID for such EVs therefore enabling buyers to quickly verify any information they are given by the sellers. Meanwhile, blockchain technology and services company, BlockchainXdev, is building a vehicle ID since research from FIA (Fédération Internationale de l’Automobile) claims that 15% of vehicles circulating in Europe were subject to mileage frauds in 2018.

• high production costs

Pre and post the COVID-19 pandemic, the cost of raw materials has risen and higher production costs have not been helped by an increase in transport overheads and general supply chain challenges. Blockchain-powered platforms can be used to track and trace materials that are being transported for production and generally improve supply chain efficiencies. 

• few charging stations

EV enthusiasts are reticent about buying EVs due to concerns about the availability or lack of charging points when embarking on a long journey even though, in the UK alone, apps such as ZapMap now list over 400,000 EV charging points. One-way blockchain technology is tackling this problem is by facilitating power trading between charging ports and those who need it. Examples of blockchain start-ups facilitating this trade are BlockCharge, Charg, Chargemap, Aerovironment, Share&Charge and Easy Park. To showcase how creating vehicular IDs and wallets with blockchain can solve charging issues for EVs, BMW partnered with Energy Web earlier in the year. Owners will no longer have to worry about their EV running out of power as they can look for available car chargers in areas before they embark on commutes. They leave with their cars charged, and the charger owner is adequately paid. All these are powered by blockchain peer-2-peer applications, which ensure these transactions are safe for involved parties. The advent of fast charging makes the concept all the more alluring as EV owners would not have to spend as much time charging. Energy Web is another example which can be seen with the partnering between itself and Vodafone and Mastercard, incorporating them into its payment system for EVs.

The EV industry was supported at the 2021 Conference of Parties (COP) meeting in Glasgow. The COP 26 declaration from governments across the world, major automotive manufacturers, fleet owners, financial institutions, and investors with significant shareholdings in the automotive industry all agreed to “rapidly accelerate the transition to zero-emission vehicles to achieve the goals of the Paris agreement”, supporting growing concerns around climate change and whereby encouraging governments to ban the sale of new petrol and diesel cars: 

• Denmark - by 2030

• France - by 2040

• Ireland - by 2030

• The Netherlands - by 2030 

• Sweden - by 2030

• UK - from 2030, and hybrid cars by 2035 

• USA - plans to ban petrol cars by 2030

• India - non-electric cars by 2030

• Spain - new internal combustion car sales by 2040

How blockchains can be used in the EV sector

               Source: Forbes

The road ahead to building the infrastructure for EVs presents many challenges. How much blockchain technology will be used is still to be truly determined, but it is highly likely that it will be part of the technology mix in helping to encourage EV adoption.