Peru, a country not normally associated with Bitcoin or cryptocurrencies, is experiencing a significant increase in the adoption of digital currencies after the first round of its presidential voting process. The presidential candidate with the most votes, Pedro Castillo, is known for his interventionist policies, so Peruvians may be preparing for what might be seen as a recession.
Peru’s cryptocurrency trading volume surges
According to a report by Buda, one of Peru’s leading cryptocurrency exchanges, during the first week of the presidential vote, Peru’s cryptocurrency trading volume experienced significant growth. This may have something to do with the definition of votes, among which candidates with an interventionist attitude are the favorites to win the economy.
Compared with the week before the presidential election, the volume of cryptocurrency transactions increased by nearly 24.14% in the weeks leading up to the presidential election, and continued to grow in the week after the election, increasing by 24.36%. In almost the same way, in those few weeks, Bitcoin’s transaction volume also increased by 25.10% to 23.05%.
Pedro Castillo was one of the favorites to win votes. He adopted interventionist policies in economic policy and talked about nationalizing some of the country’s main activities, including mining, oil industry and telecommunications. This has caused some concerns among citizens that they may switch to cryptocurrencies to avoid future currency depreciation.
Peru follows in the footsteps of Argentina and Venezuela
If this kind of political change does happen, Peru may be the next country in Latin America to experience a cryptocurrency exchange boom, just like Argentina and Venezuela have done before. The latest poll by the Peruvian Studies Institute shows that Pedro Castillo is 44.8% ahead of his opponent Keiko Fujimori, who is ranked second with 34.4% of the vote intention.
Although it is too early to predict what will happen to Peru in the country if it follows the interventionist path, currency devaluation may lead to foreign exchange controls, which may lead people to use cryptocurrencies as an alternative to hedge their funds.
This is what happened in Venezuela and recently in Argentina, where sick citizens have switched to cryptocurrencies in an inflation-driven economy. The decentralized nature of Bitcoin and other cryptocurrencies makes them ideal for this use case because they cannot be controlled by countries that try to undermine the economic freedom of their citizens.
What do you think of the increase in the number of people adopting cryptocurrencies in Peru? Tell us in the comments section below.
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