What are the cryptocurrency habits in Colombia?

Cryptocurrency in Colombia is positively thriving. The overwhelming majority of the population is familiar with Bitcoin and other crypto-assets.

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The country now boasts a highly tech-savvy generation who are constantly on the lookout for new growth opportunities.

According to a survey by Bitcoin trading platform Paxful, 80% of Colombians are open to investing in cryptocurrency. Many young people are already used to trading digital coins. In fact, almost half of the people surveyed between 25 and 40 years old own cryptocurrencies or plan to buy some soon.

In 2019, Paxful alone has seen over $1 million in transactions from Colombian users.

Cryptocurrency in Colombia is popular

Many cryptocurrencies in South America are thriving as people look for alternative ways to counter inflation. This isn’t necessarily the case in Colombia however, since the inflation rate has been pretty stable this year. After surpassing the 7% milestone in 2016, the inflation rate has since come back down to lower values, recently reaching 3.42%.

While 3.42% may still seem high for stable economies, that’s a low rate for South America. So, inflation alone isn’t driving Colombian people towards cryptocurrencies.

Colombia’s case is different. The country has a recovering economy, and the population is open to new opportunities, such as cryptocurrency and fintech start-ups. In 2018, Bogotá ranked seventh in the list of top Bitcoin cities, with 87 active crypto businesses.

Colombian authorities haven’t provided a legal framework for the crypto ecosystem to fully develop yet, but the population continues to invest in digital assets.

The popularity of cryptocurrency in Colombia may also be a result of people’s reluctance to engage in traditional banking. As in most countries in Latin America, a significant part of the country’s population is “unbanked”. Many people don’t trust banks, don’t have a savings account, or simply prefer peer-to-peer alternatives for investing.

Blockchain technology is also becoming more popular, as more organisations begin to implement pilot projects. The Colombian government is taking a welcoming approach to technology, and local and central authorities are also ready to implement blockchain solutions to solve their problems.

Venezuelans in Colombia opt for cryptocurrency

Another factor that may have changed the cryptocurrency habits in Colombia comes from other countries on the continent.

Colombia has received almost 1.4 million Venezuelan refugees over the past few years. Refugees have significantly contributed to the adoption of cryptocurrency in Colombia.

Venezuelans come from a country facing a severe economic and humanitarian crisis. Its government has experimented with the oil-backed cryptocurrency Petro, and Bitcoin and Dash are being used as both stores of value and payment methods.

Many people from Venezuela are familiar with the benefits of using cryptocurrencies and they continue to use them even after reaching Colombia – for sending money back home, for example.

Preference for Bitcoin

South America seems to have developed a passion for Bitcoin, and Colombia is no exception. The Paxful report showed that 79% of locals preferred using Bitcoin to preserve their cash, followed by a great distance by Bytecoin, Ether, and other cryptocurrencies.

Why Bitcoin? Besides the fact that everyone has heard about it, another reason may be the wide acceptance of this digital currency. Bitcoin is already an accepted form of payment for online shopping at many businesses.

Moreover, many financial institutions and tech start-ups also rely on Bitcoin when developing crypto-products.

Bitcoin ATMs are thriving as well

People buy most cryptocurrency in Colombia either on peer-to-peer exchange platforms or directly from Bitcoin ATMs. As a general rule, the less they have to deal with third-party financial institutions, the better.

Among the most trusted cryptocurrency exchanges in Colombia are LocalBitcoins, Binance, and Kraken. Locals also seem to have a preference for platforms that allow users to buy cryptocurrency anonymously, such as Paxful or Coinmama.

Moreover, the Bitcoin ATM market has been growing. Colombia hosts 54 Bitcoin ATM installations spread across the entire country. The highest concentration of machines is in Bogotà, with 32 ATMs, and Medellin, where people have access to 11 devices.

Puntuación
Posición en Iberoamérica
1
Juan Esteban Saldarriaga
Vice President at Alianza FinTech Iberoamerica | Co-Founder Rapicredit | ColombiaFinTech.co
24.4
5
2
Edwin Zácipa
Executive Director at Colombia FinTech | Managing Partner MiBank.co | Founding Member FinTech IberoAmérica
20.4
17
3
Diego Molano
Consultor internacional en temas de TIC e innovación
19.4
18
4
David Velez
Founder and CEO at Nubank
17.0
27
5
Martin Schrimpff
Co-Founder of Zinobe | Founder of PayU | Founder Pagosonline.net
15.6
32
6
Ángel Sierra
Director Ejecutivo en Asociación FinTech e InsurTech de Chile | Member of Alianza FinTech Iberoamerica
14.8
39
7
Paula Cardenas
Business Manager at AEFI | Founder Member FinTech IberoAmérica
14.5
42
8
Clementina Giraldo
FinTech & AgTech in Latin America
11.8
60
9
Juan Francisco Schultze-Kraft
Board Member – Vicepresident at Colombia FinTech | PayU Legal
11.4
63
10
Daniel Rojas
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10.1
69
11
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Digital Transformation Enablement – Latam at Microsoft
7.3
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12
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6.3
101
13
Diego Alejandro Guzman Guevara
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6.2
104
14
Andres Ramirez Sierra
CEO at Banlinea LATAM
6.2
105
15
Daniel Navarro
CEO & CoFounder at NIMMÖK
6.1
109
16
Fernando Sucre
CEO at ComparaMejor
5.9
110
17
Andres Villaquiran
Founder & CEO Alkanza
5.3
119
18
Carlos Castañeda Olaya
Open innovation leader at Accenture | Country Manager at Wayra
5.2
123
19
Marisol Camacho
Director of Corporate Relations at Bancóldex | Director of Mindset at iNNpulsa Colombia
4.6
131
20
Felipe Valencia
Partner at Veronorte
3.7
143
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