Latin America and the Caribbean are in some ways ahead of the curve when it comes to adoption of digital assets.
El Salvador anointed cryptocurrency as legal tender last September, coinciding with a wave of “crypto-friendly” regulations that rolled out across the region. And for socialist countries such as Cuba and Venezuela, struggling under U.S. sanctions, digital currencies have become a lifeline for purchasing goods and services.
The warm welcome given to digital business is due to the relatively low penetration of traditional financial services in the region, combined with a painful history of spikes in inflation, stomach-churning foreign exchange fluctuations and widespread familiarity with sophisticated payment methods in certain countries that have been embraced to combat high rates of fraud.
“Given the serious problem of inflation and the need not to miss the technological development train, crypto adoption in Latin America has been very important,” says Marc Gericó, managing partner of Gericó Associates, a Madrid-based marketing and business development consultancy for law firms that operate in Europe and Latin America.
Last year, Gericó began accepting cryptocurrency as payment for services to accommodate an Argentine law firm client that was unable to pay suppliers in a foreign currency.
Governments in some Latin American countries, including Argentina, limit the amount of local currency that may be exchanged for global currencies, such as the U.S. dollar and the euro, in an effort to stabilize their domestic exchange rates and economies.
Meanwhile, the advent of smartphones has helped bridge the digital divide in Latin America and the Caribbean, opening a host of services as well as perils for consumers. For instance, Brazil, a country with more than 210 million people and the region’s largest economy, consistently ranks among those with the highest incidents of cyberattacks.
Law firms that work in Latin America and the Caribbean are scrambling to keep pace with the next phase of the digital revolution by boosting their capabilities in areas such as data privacy, intellectual property, technology and consumer finance.
Gabriela Scanlon, a Brazilian litigator based in Washington, D.C., who joined Akerman in May as part of a rebrand for the U.S. firm’s consumer finance practice, sees enormous potential for data privacy and compliance work in Latin America as digital services expand.
A handful of Brazilian lawyers with deep data privacy experience have been doing brisk business since the country enacted a comprehensive data protection law in 2020 that broadly aligns with regulations in the EU.
Scanlon sees that demand reaching into the realm of U.S.-qualified legal advisers as Brazilian technology firms grow and transactions in greenbacks raise red flags with U.S. regulators.
“I don’t see any U.S. firms offering those services in South America,” she said. “Crypto combined with different money transfer methods — it’s gold.”