After a roller coaster year for the value of cryptocurrencies in 2022the tide appears to be leveling.

(Also: The crisis that triggered the collapse of the Silicon Valley Bank in the United States)

According to CoinsPaid, a European leader in cryptocurrency processing, the cryptocurrency market signaled the end of the «crypto winter» by recording $2.9 billion in trading volume of cryptocurrencies in the first quarter of 2023.

(You may be interested in: Differences between the collapse of the Silicon Valley Bank and the 2008 crisis)

«We believe that digital assets have the potential to gain prominence amid the impacts that the traditional financial system has suffered, as the digital economy seeks to give users more autonomy«, says Max Krupyshev, CEO and co-founder of CoinsPaid.

The month of March started positively for cryptocurrencies with major cryptocurrencies showing a consistent recovery and, after the US government bailout of Silicon Valley Bank (SVB)It led BTC to have an increase of approximately 18 percent (day 13) and with the expectation that this new momentum will also benefit other currencies.

«We understand that what happened with SVB raises some doubts about the cryptocurrency market. However, when we look at the increasing number of possibilities of use and the number of people who join cryptocurrencies, the potential of this market is reinforced in its whole and sheds light on the need for regulation,» says Krupyshev.

A cryptocurrency is a digital currency that uses cryptography to guarantee and verify the security of transactions, as well as to control the creation of new units.

the recent FTX and SVB crises reinforce the need for entities to guarantee the security of their operations and the credibility of their clients in the midst of a possible context of global recession. This refers to situations similar to the «tech bubble» of the early 2000s and the financial markets crisis of 2008, in which both the financial system and the financial system went through a similar situation due to lack of control and speculative character.

Estefano Debernardi, Coinspaid’s director of business development for Latin America, details the market situation and sheds light on when is the ideal time to invest in this field.

The countries that are leading this metric are Brazil, Argentina, Colombia, Mexico and Chile.

What is the cryptocurrency landscape?

Cryptocurrencies are likely to face some challenges in the coming months, not just from the SVB crisis, but from accelerating regulatory debates in the United States. Likewise, in addition to the proposed regulation of cryptocurrencies in Hong Kong, other countries, especially those in Latin America, which have experienced strong growth in the adoption of cryptocurrencies in recent years, will also move in this direction as a way of protecting its financial system from a situation similar to that which occurred with the SVB.

How are cryptocurrency transactions made?

Transactions are made by first having access to a wallet, then knowing that one is going to send, after making the transaction and after the confirmations of the block chain (this depends on the network used) the funds will be visible in the wallet of the another person

What are the challenges of the sector for the market in Latin America?

In Latin America we are still in the process of adoption (people who use cryptocurrencies, companies that are beginning to use them more and more), education and legal advances (specific laws for cryptocurrencies). The countries that are leading this metric are Brazil, Argentina, Colombia, Mexico and Chile, all of these have laws (some still in the process of approval) that will give greater guidelines and generate more confidence to bring in institutional capital and allow related industries to grow at the pair.

Why do you think the bankruptcy of SVB has benefited the crypto sector?

In my personal opinion, it benefited somewhat because the people who were «overseeing» the bank understand that it was not the cryptocurrency industry that forced this collapse. Yes, there were funds from some cryptocurrency-related companies in the bank, but there is no direct «harm» involved. I think the companies involved need to make sure that their working capital is not 100 percent in a bank, make sure that they have up-to-date risk management, and finally to cryptocurrencies in real time the performance of bitcoinbegan to increase in value while this was in progress.

The regulation on the use of cryptocurrencies depends on each government.

What can you expect from cryptocurrencies this year?

I think we can expect a clear work path for the companies that are already in the Latin American countries, a short-term vision of what is to come and the whole world depends because certain parts of the world want to ban and control 100 percent percent of the crypto market, others want a more flexible/innovative future.

Which country do you think will be the next leader when it comes to cryptocurrencies?

I would keep my eyes on the first three that have a track record: El Salvador, Singapore and Portugal, in the latter, however, they will increase taxes, so it will come out of it. I would dare to say Brazil, but we will see how the adoption continues with the new payment law.

Do you think that the current economic situation has endangered the traditional banking sector?

I believe that the banking sector has been under the eye of the hurricane since 2008, we did not see any direct action from the places that suffered the most and, now, I believe that they are hanging on by a thread because if the situation worsens, it will be the sector indicated and there will be Let’s see how they manage.

STEPHANY ECHAVARRIA
INTERNATIONAL EDITOR
TIME