By Piotr Ostrowski, Online Travel Operations Director at Oojo
This year has marked significant strides toward a major consolidation of crypto assets, particularly in Latin America. Just a few years ago El Salvador, for example, took the initiative in promoting financial inclusion and became the first country to adopt Bitcoin as a legal tender worldwide. With Argentina leading the region in terms of cryptocurrency value received at an estimated $91.1 billion (slightly ahead of Brazil’s estimated $90.3 billion*), the region holds a lot of promise of being the next “it” destination for major crypto developments. The young, tech-savvy population is hungry for changes in the financial sector and is therefore driving crypto adoption further, boldly positioning the region as a leader across the globe.
As cryptocurrency continues to gain momentum, its impact on various sectors, travel, is becoming impossible to ignore. However, the need for robust security and tighter regulations has become a critical roadblock to crypto’s growth. Without these safeguards in place, both users and businesses could face significant risks, making these precautions the essential baggage that ensures the smooth journey of crypto in the travel world.
Setting Sail with Crypto
Let’s face it: crypto is becoming an integral part of the travel industry. About 67% of consumers in Latin America express interest in using cryptocurrency for travel, alongside traditional payment methods**. In countries with limited access to traditional banking, like Argentina and Venezuela, travelers are turning to crypto-friendly booking platforms, such as Travala or Skylux Travel; such platforms allow crypto-powered payments for flights, hotels, and activities, therefore winning clients‘ confidence.
As traditional payment methods might come with hefty exchange fees and delays, cryptocurrency for travel payments offers a fast, secure, and cost-effective way to make cross-border payments straight away. As an example, imagine a traveler from Argentina booking a trip to Mexico. Traditional payment methods would require hefty exchange fees, especially with Argentina’s restrictive currency policies. But, when it comes to crypto, the same traveler can pay directly and instantaneously – skipping the middlemen and keeping costs in check.
In other words, the payments can be made anytime from anywhere, without being tied to a specific banking system, which is particularly useful for families relying on remittances. But to set sail smoothly, crypto needs the right regulatory winds, or else its potential in travel could hit rough waters.
The Watchdogs of Crypto
I know what you’re thinking – crypto in LatAm smells fishy. But it’s more like a fresh catch with real substance, as crypto assets are adding a real thick layer to Latin America’s economy, plus regulatory bodies are stepping in to provide a stable legal ground. Crypto assets offer Latin America a very appealing benefit – it offers stability, which is particularly meaningful keeping in mind that economies in Latin America are historically sensitive to inflation and currency fluctuations.
While cryptocurrency regulations in Latin American countries vary widely with countries like Bolivia, Ecuador, and Venezuela taking restrictive measures towards crypto and either prohibiting or keeping it to the bare minimum, most of countries in Latin America are opting a comprehensive regulatory framework of cryptocurrencies, recognizing Bitcoin as legal tender while also introducing stricter oversight and progressive income tax frameworks.
In Colombia, for example, an estimated 11.3% of the population has used or owns cryptocurrencies, which represents approximately 5.7 million people in the country – the numbers are indeed very promising. Colombia, for example, has implemented a regulatory sandbox through its Financial Superintendence (SFC), where it tests and assesses crypto business models in a controlled setting, and a new, stronger standard is expected already by 2025iii. This includes mandatory registration, transparency, and strict AML/KYC policies to align with global standards—positioning Colombia as a secure and attractive crypto market.
New regulations are in process, with the objective of boosting transparency and protecting investors by requiring crypto companies to disclose product risks. Such standards bring crypto closer to traditional finance practices, reducing fraud and market manipulation risks.
On top of that, the entire region is undergoing a significant shift in regulatory frameworks, driven by its Central Bank which is taking the initiative to provide safer legal ground for both businesses and users alike.
Clearing the Air
For the industry, crypto payments reduce user friction which used to be a major hindering factor when booking travel. But if these new forms of payment are not secure, reliable, and properly guided, the whole system essentially collapses – without any chance of ever recovering user trust.
Latin America’s crypto journey is just taking off. Global and borderless, crypto and tourism make the perfect marriage material, and as the legal setting is now being arranged, this pairing looks ready for its ‘happily ever after’.
