This article has been republished with permission from Binance News.
According to Cointelegraph, a recent report from blockchain analytics firm Chainalysis reveals that Latin America has a distinct inclination toward centralized exchanges when compared to the rest of the world, as opposed to decentralized exchanges. The report, published on October 11, states that Latin America has the seventh-largest crypto economy in the world, trailing closely behind Middle East and North America (MENA), Eastern Asia, and Eastern Europe.
The study notes that crypto users in Latin America strongly favor utilizing centralized exchanges, with some countries within the region showing crypto activity by platform type significantly exceeding the global average. The worldwide average is 48.1% for centralized exchanges, 44% for decentralized exchanges, and 5.9% for other decentralized finance (DeFi) activities. However, Venezuela shows a 92.5% preference for centralized exchanges, compared to a 5.6% preference for decentralized exchanges (DEXs).
The report attributes Venezuela’s surging adoption to a ‘complex humanitarian emergency,’ explaining that amid the COVID-19 pandemic in 2020, crypto played a pivotal role in directly assisting healthcare professionals in the country. Crypto became a necessary form of value as traditional payments were difficult, given the government’s refusal to accept international aid, influenced by political reasons. In contrast, Colombia shows a 74% preference for centralized exchanges (CEXs), while decentralized exchanges (DEXs) account for just 21.1% of their preferences.
Additionally, three Latin American countries secured positions in the top 20 ranks on Chainalysis Global Crypto Adoption Index. Brazil stands at the 9th position, with Argentina following at 15th, and Mexico at 16th. At the global level, India claims the leading spot, with Nigeria and Vietnam securing second and third positions, respectively.