NFTs are becoming mainstream amid the rising cryptocurrency adoption in Latin America

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The Latin American economic environment has resulted in a growing adoption of cryptocurrencies among citizens over the last few years. The number of financial and political crises in the region has resulted in a perfect environment for the growth of cryptocurrency adoption in Latin America. Notably, Argentina and Venezuela have witnessed a substantial rise in inflation rates, 79% and 114%, respectively, in 2022. Amid the growing instability in the region, citizens have found cryptocurrencies as a powerful tool to preserve value amid the plummeting local currencies.

The major shift towards cryptocurrency has also resulted in various developments in the NFT sector in Latin America. Notably, non-fungible tokens (NFTs) have reached the mainstream audience in developed markets. Projects such as the Bored Ape Yacht Club and CryptoPunks are highly sought digital collectibles in the United States and other developed countries. With the interest in cryptocurrency growing in Latin America, firms have started to invest in various NFT uses cases, such as supporting local artists and allowing customers to resell their airline tickets or donate to the non-profit organization. For instance,

• Engima.art, is a decentralized platform that provides NFT development services for artists in the region and connects artists with their fans through non-fungible tokens. Notably, the firm has over 5,000 users and 1,500 wallets connected to the platform since its inception in 2021. The platform allows users to buy original songs from the artists, who in return receive a royalty percentage of the purchase. The firm has partnered with various artists in the region, including Marta Minujin who sold her first NFT for 24 Ethereum. Bizarrap, an Argentina-based music producer, is another artist that partnered with the firm to sell the work as NFT. Notably, the music producer sold his first NFT, part of a larger NFT collection, for 100 Ethereum.

NFTs in the Latin American region is not just limited to art-based and music industry. Regional players are also innovating with NFTs in more traditional sectors. For instance,

• In August 2022, TravelX, a marketplace offering tokenized travel products, started offering tokenized airplane tickets. Notably, the firm entered into a strategic collaboration with Flybondi, a low-cost Argentina-based airline. Under the partnership, the firm announced that it will offer 2.5 million airplane tickets which when purchased are tokenized and converted into NFTs, NFTickets. The buyers can auction sell, transfer, gift, or exchange these NFTicket through the travel platform.

Furthermore, amid the rising cryptocurrency adoption in Latin America, exchanges are also seeking to boost the popularity of NFTs among their users, thereby looking to capitalize on the growing shift toward digital assets. For instance,

• In August 2022, Lemon, one of the leading cryptocurrency exchanges in Latin America, created a unique NFT avatar for each one of its one million users in Argentina and Brazil. The NFT avatars, Lemmys, are given for free by the exchange to all users. Currently, users cannot modify, trade, or purchase the NFT avatars. However, the firm is expected to make it possible in the near future. As of October 2022, more than 400,000 users have claimed their free NFT on the platform. Notably, the one million NFT avatars launched by Lemon is one of the biggest NFT collection in the world.

NFT adoption is still in its early stages and is expected to further grow over the next three to four years. As more regional players innovate with varied NFT use cases, TechInsight360 expects the industry to grow into mainstream popularity, like the adoption of cryptocurrency, over the next three to four years.

The market growth will also receive assistance from innovative NFT startups that are launching NFT marketplaces to introduce the region to Web3. Notably, these firms are raising funding rounds to further accelerate the adoption of NFTs in Latin America. For instance,

• In September 2022, Minteo, a Latin American NFT marketplace, announced that the firm had raised US$4.3 million in a seed funding round. Notably, the platform will enable artists, collectors, brands, and other members to buy, sell, and trade NFTs. The marketplace is expected to lower the barrier for Latin Americans to NFTs, thereby driving the adoption of the digital asset class in the region from the short to medium-term perspective.

While the global NFT sector is facing pressure amid the ongoing sell-off in cryptocurrencies, the rising adoption of the digital asset class in Latin America can support the industry growth over the next three to four years.

To know more and gain a deeper understanding of the NFT market in Latin America, click here.