A recent report by IOV Labs has highlighted the power of crypto and DeFi in combating hyperinflation in Latin American countries. Hyperinflation refers to high inflation rates that cause citizens to use more stable currencies. Currently, five Latin American countries, including Venezuela and Argentina, are experiencing hyperinflation. The problem poses a significant challenge for governments as it threatens the livelihoods of their citizens. The report reveals that over a third of people in Latin America now use stablecoins for everyday purchases, well above the global average. Blockchain-based technologies could also save financial institutions $10 billion by 2030 in terms of reduced cross-border transaction costs. However, the region lacks a regulatory sandbox to test innovative products. The most popular blockchain-based solution is stablecoins like USDRIF, which provides stability against currency instability and inflation. Despite the potential of blockchain-based solutions, there is currently no effective framework to combat hyperinflation.
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