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The economic crisis in Latin America, exacerbated by the COVID-19 pandemic, has caused interest in Dai to skyrocket in the past couple of months.
According to a report from local news outlet iProUP, the trading volume of MakerDAO’s stablecoins quadrupled during quarantine in Argentina from $5 million to $20 million daily.
Latin America Flocks to the Safety of Dollar-Pegged Stablecoins
Hit with sovereign debt and hyperinflation, countries in Latin America have entered the COVID-19 pandemic already struggling economically.
One of the ways that the struggling countries have been dealing with the crisis has been through the adoption of cryptocurrencies, which many believe are their ticket out of currency devaluation.
According to a report from Argentinian tech news outlet iProUP, many residents of the region have found solace in the “digital dollar”—the Dai stablecoin.
MakerDAO said that Dai momentum has been steadily building in Argentina for quite a while, but exploded once the country was hit with the COVID-19 outbreak.
An unnamed cryptocurrency exchange told iProUP that interest in Dai quadrupled after quarantine was introduced in Argentina—trading volume surged from $5 million per day to a whopping $20 million per day.
“At the beginning of 2020, only one exchange in the region offered Dai; today, there are six,” MakerDAO said.
MakerDAO Says Dai Has Gained Incredible Traction
Given that Dai was “barely known” in the region two years ago, MakerDAO, the company behind the dollar-pegged stablecoin, said that this was an incredible achievement.
“Many Latin Americans want dollars because they don’t trust the local currency,” said Nadia Alvarez, MakerDAO’s business development associate for the Latin American region.
She explained that at the time, Latin America was only interested in Bitcoin, which made it difficult to attract people to Dai.
However, due to the mainstream appeal of cryptocurrencies, especially when it comes to surviving hyperinflation, other coins such as the dollar-pegged Dai were quickly adopted.
Crypto exchanges and fiat on/off ramps, such as Bitso and Buenbit (Argentina’s leading Dai exchange), are growing in popularity throughout Latin America, as are mobile wallet apps such as Argent, MakerDAO said.
Dai has also become a popular store of value in Argentina, with people converting Dai back to their local currency as they need it.
Featured image from Shutterstock.
