The use of digital currency is a phenomenon that continues to grow in popularity throughout the world. Curiosity turns into adoption as more and more people find this type of currency to be an interesting and productive way to exchange their money.
Much has happened since 2008 when Satoshi Nakamoto decided to introduce a global decentralized currency that operates through a peer-to-peer transaction system. In recent years, its use has grown considerably reaching at least 17 million users worldwide, according to figures reported by Cambridge Center for Alternative Finance in 2018. In Latin America, this financial dynamic is gaining strength in countries like Colombia, Brazil, Argentina, and Venezuela.
To deepen the context of digital currencies in Colombia, Paxful, a leading global peer-to-peer bitcoin trading platform, conducted research with the support of Toluna Insight to measure the level of impact and perception Colombians have regarding these currencies and how their outlooks might be in the future.
Although the digital currency has been gaining strength throughout the country in recent years, a public survey conducted by Paxful in Colombia showed that 86.5% of respondents were familiar with cryptocurrency and that 80% were open to investing. However, there is still a reluctance (just under 20%) to use digital currencies as a financial alternative. This percentage indicates that initially, they would not invest due to a lack of knowledge about the transactions (nearly 40%), because there is still a mistrust around them (over 32%), or because they consider it a risk due to lack of regulation (6.5%).
The increased use of digital currencies is likely linked to a hyperconnected generation constantly on the lookout for options that not only allow them to have 24/7 access to their financial assets but also give them the freedom to make online global transactions in a simple way. According to the Paxful survey, at least 50% of those surveyed between the ages of 25 and 40 are already investing or expressed interest in buying digital currencies such as bitcoin (79%), Bytecoin (under 5%), or Ethereum (over 3%), among others.
The figures show that this is a trend that will continue to grow in the coming years, with many believing that Colombia is making positive progress to strengthen this system of transactions. 58.7% of respondents expressed belief that the number of cryptocurrency adopters will only continue to grow, with 11% believing that there are strong movements towards supporting this system. In 2019 alone, there have been over $1 million in transactions on Paxful from Colombian users.
Among those surveyed, it was evident that the perception of these types of transactions is mostly positive and hopeful, pointing out that under 1,48% were doubtful and 4,45% fear fluctuations in the value of the currency. The other side showed that the interviewees considered the currency to be a good form of investment (60.5%), a positive example of globalization (over 13%), and a great technological advancement that will be necessary to adopt at some point (under 20%).
What’s coming next?
One major highlight from the survey is that 91% of respondents agreed with the notion that digital currencies will mark the future of world trade. This served as a great indicator of what the future of cryptocurrencies could look like for Colombia.
Colombia is currently experiencing a crucial moment in the crypto industry. Interest is so visible that Banco de la República, the central bank of Colombia, is already part of the Distributed Ledger Technology (DLT) initiative of blockchain technology to provide greater security to the growing rate of users already making use of these financial assets. Against this backdrop, 58% of respondents believe that the country is on the right track and that having these regulations would undoubtedly provide more confidence and open the space for more people to invest and carry out transactions using digital currencies.
Paxful has taken an active role in Colombia, offering opportunities to buy and sell bitcoin not only in USD but also in Colombian Pesos.
“Colombia is a very promising market for Paxful. We have seen an interesting increase of over 70% in trades compared to the previous year or 2018. These numbers also corroborate the results that this study shows us.” says Magdiela Rivas, Paxful ́s Latin American Manager.