Financial inclusion has always been one of the main promises of cryptocurrency, particularly in regions with historically poor access to credit. In Latin America, amidst a troubled global economy, that motivation is as strong as it has ever been. 

A hotbed for crypto innovation and web3 adoption, Latin America faces more economic troubles than most. The regional economy, which experienced strong growth of 6.8% in 2021, is expected to slow to just 1.7% in 2023 according to Deloitte. As a consequence, the IMF predicts higher borrowing costs and slower capital inflows for the region in the near future. 

In a region with a worrying record on gender equality, women will bear the brunt of that impact. Web3 represents access to alternative sources of credit and a path to a financial future more independent of their local economies. But given Latin America’s gender inequalities, web3 also plays a role as a force of feminism and equal rights.

“Hyperinflation is driving crypto adoption in Latin America.”

— Courage Kimber, Web3 Facilitator, Station F

To rein in ballooning inflation, central bankers across the region have resorted to tighter monetary policies, resulting in some of the highest interest rates in the world. Mexico’s stands at 11%, Brazil clocks in at 13.75%, whilst Haiti’s interest rate has reached 17%. Argentina rules the roost: Buenos Aires raised rates to 78% in March, after inflation passed 100% for the year.

Getting a loan at reasonable interest levels has become next to impossible, particularly for the 60% of workers, largely women, who work in the Latin American informal sector, and thus lack access to a proper credit score.

These factors have created an environment ripe for the widespread adoption of cryptocurrency. “Hyperinflation is driving crypto adoption in Latin America, where it’s challenging to get access to US dollars,” says Courage Kimber, a web3 facilitator at Station F, the business incubator. 

Indeed, MasterCard report that one in every two Latin American customers used crypto assets in 2022. That same year, the region accounted for 9.1% of global crypto value received — a 40% increase in twelve months — despite representing just 5.6% of the global economy. 

Latin American governments have become more open to the web3 ecosystem as a result. El Salvador attracted headlines by becoming the first country in the world to legalise Bitcoin as national tender in 2021, but others like Brazil, Mexico, and Colombia are experimenting with digital stablecoins too, whilst Brazil allows citizens to pay tax using crypto.

For individual crypto users, that interest is particularly likely to come from women. Women in Latin America are more likely to own crypto than in any other continent. The specific regional context of a precarious economic and gender landscape is a large part of the explanation. “Women in South America are adopting crypto because their local currencies do not provide them with a viable option for financial independence,” Courage explains, noting that women’s finances are often tied to the whims of male relatives or partners as much as the direction of their local economy.

As traditional banks, both national and private, struggle to provide affordable credit to consumers, web3 startups are leveraging the blockchain to offer more equitable finance across Latin America. 

Ledn, a Canadian bank, has accumulated over 125,000 customers since launching in the region in 2019. A savings account and a lending institute, Ledn now receives 50% of its revenues from Latin America, where customers can put up crypto as collateral and receive dollars in a loan at interest rates far below traditional providers. The company has provided over $500m in loans, with an average loan size of just under $10,000.

Other companies like Buenbit, an Argentinian crypto payments platform, and Quipu Bank, a blockchain banking startup based in Colombia, have set up in the region in recognition of the demand. In Peru, Num Finance uses the blockchain to tap into a large, global supply of credit, and offers loans at interest rates ten times smaller than traditional banks.

“Latin America is a region that has far fewer credit facilities than countries with similar incomes, such as Eastern Europe or South Africa,” Santiago Mignone, Num Finance’s CEO, told CoinDesk. “There is a great incentive for crypto products that bring new modalities to help expand credit in several ways.”

But to truly translate the opportunity of web3 technologies into accessible tools requires a significant wave of education and awareness in the region. The Development Bank of Latin America notes that financial literacy, where Latin America ranks amongst the lowest in the world, is a key focus for improving the equitable use of financial services in the continent. Cryptocurrency is no different. Mastercard reports that, whilst almost all Latin American women and men have heard of the term, women are far less likely to understand the core terminology. Critically, three quarters of Latin American women say they would use it more if they could learn more about it.

A major hurdle in web3 education is language. Over 55% of the content on the internet is in English. By contrast, Spanish and Portuguese content forms only 5.8% of the web. That makes high quality explainers and insight about web3 even harder to come by. Lack of reliable knowledge is a major issue for learners from Latin America.

Three quarters of Latin American women say they would use it.

On the 13th anniversary of the publication of the Bitcoin whitepaper, Monica Talan launched CryptoConexion to inspire crypto-curious Spanish speakers in Latin America. “We are focused on helping Spanish-language speakers regardless of where they are on their blockchain journey,” Monica tells Culture3. “Latinas have been historically underrepresented in tech. We support women through education, where we work with more than 40 community organisations and entrepreneurs to provide and curate easy-to-understand content, and amplification, where we amplify the work of women building in web3.”

In October 2022, CryptoConexion launched WAGMI LatAm, alongside the developer community, HER DAO, and the founders community, Unstoppable Women, with the goal of onboarding 5 million Latina women across Latin America by 2030. Dedicated to promoting web3 in Spanish and Portuguese, Monica says the group reaches 200,000 people every month with education, research-content, and grant offerings. “The initiative helps us build community across the region, share best practices, and support each other,” she explains. In a region of the world where 51% of women don’t even have access to a bank account, that roadmap is as important as ever.

“Their local currencies do not provide them with a viable option for financial independence.”

— Courage Kimber, Web3 Facilitator, Station F