Welcome to Latam Insights Encore, a deep dive into Latin America’s most relevant economic and crypto news from the past week. In this edition, we examine how XRP has evolved from being just a remittance tool to becoming one of the preferred assets in Latam’s portfolios, and how its popularity might continue to rise.
Latam Insights Encore: Examining How Latam Is Embracing XRP
XRP, the cryptocurrency asset linked to Ripple’s operations, has experienced continued growth in the world, and Latam is no different. According to a recent report from Bitso, a large Latam-focused cryptocurrency exchange, XRP is part of a significant percentage of all the portfolios in the region, second only to bitcoin.
This was not always the case, as XRP has faced headwinds before linked to its regulatory situation that was, at last, clarified after years of judicial struggles. This has contributed to the adoption of the asset not only in the U.S. but also in other jurisdictions.
XRP was first introduced in Latam as a purely transactional asset, serving as middleware to complete cross-border transactions in the region, largely driven by dollar-based flows. Bitso was one of the pioneers in this area, setting up a service that leveraged Ripple’s network and XRP for moving value between Mexico and the U.S., claiming at one point to have contributed to transacting 10% of all bi-national remittances volumes.
This use case continues to be key even today, with Mexican users being big adopters of XRP. Nonetheless, XRP has also grown to be considered a speculative asset, or even a reserve of value in some cases.
12% of all portfolios in Latam now hold XRP, and while the causes of this surge are still unclear, it is clear that part of this interest has its origin in the recent crypto bull market that saw XRP rise from sub-dollar prices to over $3 in just months.
There is a big opportunity for XRP in Latam, and Ripple must embrace it and seize the moment by offering incentives to its regional users through third parties to incentivize savers and investors.
If the company plays its cards well, XRP might become a key asset in a region that is a hotbed for the world’s crypto adoption, transacting billions in remittances, and with investors hungry for risky bets with larger payouts.
Read more: Bitso Report: XRP Rises as a Dark Horse in Latam Portfolios
Read more: Ripple Director: Latam Is Leading the World’s Crypto Discussion