IOV Labs has published a new report entitled “Taming Inflation: How DeFi is Reshaping Finance in Hyperinflationary Countries,” which examines the power of DeFi solutions to relieve inflationary pressures felt by individuals and businesses within regions of the world experiencing hyperinflation.
Key findings from the report include:
- More than one-third of individuals across Latin America have embraced stablecoins for everyday purchases, far surpassing the global average of 11%.
- Blockchain technologies are expected to save financial institutions USD $10 billion in reduced cross-border transaction costs by 2030.
- While fintech companies in Latin America have received significant funding in recent years, the region has yet to establish the regulatory sandboxes needed to test innovative DeFi products.
In a move that reaffirms the company’s commitment to continued research around blockchain technology and its applications, IOV Labs has published Taming Inflation: How DeFi is Reshaping Finance in Hyperinflationary Countries, a new report that highlights the ability of DeFi-based products to provide an alternative to traditional financial solutions in parts of the world suffering from hyperinflation. The timely report comes on the back of a year dominated by news about inflation and in direct response to escalating rates of hyperinflation in nations across Latin America, such as Argentina.
The insightful document incorporates relevant data from recent global surveys and provides actionable recommendations for various stakeholders on how to leverage different Bitcoin-based blockchain technologies, such as Rootstock and RIF, to create cheaper, faster, and more inclusive inflation-protection solutions. As the research report explains, blockchain technologies have the potential to mitigate the effects of inflation if used correctly and can enable individuals, businesses, and traditional financial institutions to protect their wealth against these pressures.
Speaking on the new report, Toby Box, Head of Financial Services & User Services, commented: “Our new report underlines the role that blockchain technologies and stablecoins can play in helping people to safeguard their savings and navigate the challenges of hyperinflation. If you live in a challenging inflationary environment you might seek comfort in the US Dollar. As digital assets gain traction, they are quickly becoming useful for people who need to move value into US Dollars.”
Moreover, Daniel Fogg, CEO of IOV Labs, commented:
“Today, the Rootstock blockchain is maintained, upgraded, and supported by hundreds of committed engineers and builders around the world. For many of them, getting access to US Dollars, protecting assets from inflation, and securing savings from bad actors is not an abstract philosophical problem, it is an everyday reality.
This is why Rootstock exists. To act as the best foundation for a new economy. Designed by, and built for, people who need this new economy to exist.“
As IOV Labs’ report highlights, more blockchain-backed alternatives are still needed in the fight against hyperinflation. However, recent developments, such as the launch of RIF US Dollar (USDRIF) represent steps in the right direction. Developed on the Bitcoin sidechain, Rootstock which brings smart contract functionality to Bitcoin, the stablecoin provides a stable asset for individuals and businesses who want to save or send money, but who may be disincentivized due to currency instability and inflation.
To read IOV Labs’ latest report, please visit their website.