Cryptocurrencies are reaching a tipping point in Latin American payments, as multiple entities, from global payment networks to central banks, begin to embrace digital money. Driven by their lower-cost method of transferring funds, the consumer market across Latin America is embracing crypto and beginning to adopt it at record speed. Although clear regulations would give a boost to the sector, it has become obvious that the financial industry is not going to wait for regulators or governments to experiment with the technology.

With a global market equivalent of around $1.7 billion, crypto is increasingly being used for payments, investments and remittances around the world. Digital money offers several advantages to consumers in both eCommerce and land-based commerce, and market players are getting ready for a growth explosion that is expected to be seen within the next two years. Erick Padilla, COO of Mexican FinTech Dapp Payments, asserts, “We are realizing that people are seeing cryptocurrencies as real money. We are already over that line of collective uncertainty about their use.” He adds, “It’s a matter of a few years – one or two – before we see a crypto-enabled payment method becoming more common.”

While digital currencies have gained trust among consumers and some governments and are being adopted by large companies and investors to store in their portfolios, regulation is still an obstacle to their growth. Crypto is generally decentralized and doesn’t depend on government tax regulations; however, as they become used as a method of payment, there will be a need for regulatory guidance and policies. An agile framework created by all entities involved – merchants, governments and regulators – would give the market the certainty it needs and without detracting from crypto’s dynamics.

As well as progressive regulation, financial analysts list other aspects that could make crypto a common method of payment. For MasterCard, for example, two important factors that are needed for digital currencies to become a common payment type are consumer protection and currency stability. InBestGo, a Guatemalan fintech that supports blockchain, adds that another key factor for mass adoption is association with strategic and reliable partners, which will provide greater clarity and security to the transactions.

Over the past 12 months or so, Latin America has experienced growth in eCommerce that has reached the triple-digit level. It has also seen a clear trend toward a preference for digital payments. While eCommerce is a logical channel for crypto payments to achieve greater growth, experts say the brick-and-mortar market is also adopting digital currencies as a payments alternative. These payments present lower commissions for each transaction, data protection for the user and reduced fraud, which translates into a bigger margin for the business and, in turn, the potential for more affordability on the consumer level.