This research is on the regulation of cryptoassets, such as Bitcoin, in Latin America. This is the fifth chapter of my report with the University of Cambridge, (Proskalovich et al. 2023). I have given a general overview of this report already, so I am just focusing on the chapter on regulation here.

Unlike a few years ago, most regulators in Latin America are now favourable towards cryptoassets. The prevailing belief is that cryptoassets, such as Bitcoin, are a valuable alternative to traditional finance, as they have different characteristics such as being decentralised. It is expected that cryptoassets can provide growth and a more inclusive financial landscape. They can provide easier cross-border payment, investments and loans. Cryptoassets can enable open-source collaboration reducing the barriers to entry for Fintech startups. Cryptoassets like NFTs can tokenise assets such as art, so that they can be offered to investors that may not be able to purchase the whole asset. In some scenarios, the way cryptoassets use blockchain can offer transparency in terms of what transactions have happened.

The main risks are believed to be misinformation, scams, and money laundering. Key challenges for regulators include (1) not enough staff with cryptoassets knowledge, (2) insufficient coordination between countries, and (3) lack of cooperation between the public and private sector.

Figure 1. Some countries in Latin America want to lead on crypto regulation, while others want to follow

There is an increase in regulators’ attention in the last few years with most countries either having or developing specialised rules. Despite most regulators agreeing that progress must be made, there is a large difference in the pace of progress. Some countries strategy is to lead with fast and comprehensive regulation to control the risk, and maximise the benefits. At the other end of the spectrum, some countries prefer to move more cautiously, keeping the uncertainty and risk low, and accepting that the benefit will also be lower. An example of a country leading is Mexico that is the first in Latin America to regulate cryptoasset trading platforms. Most local cryptoasset companies believe regulatory uncertainty is the biggest challenge preventing their growth.

Whether the regulators strategy is to lead, follow or something in-between, they need to follow the developments in the cryptoassets ecosystem both globally, and in Latin America, so that the right decisions are made at the right time, and friction between countries is limited.

If you want to learn more about regulation of cryptoassets like Bitcoin in Latin America, you can read the fifth chapter of the report.


Proskalovich R., Jack C., Zarifis A., Serralde D.M., Vershinina P., Naidoo S., Njoki D., Pernice I., Herrera D. & Sarmiento J. (2023) ‘Cryptoasset ecosystem in Latin America and the Caribbean’, University of Cambridge – Cambridge Center for Alternative Finance (CCAF). Available from:

This research is about the business models of Decentralised Finance (DeFi) in Latin America. This is the fourth chapter of my report with the University of Cambridge (Proskalovich et al. 2023). I have given a general overview of this report already, so I am just focusing on the chapter on DeFi here.

DeFi refers to several software solutions that operate on a blockchain. These decentralised systems, supported by blockchain technologies, enable various forms of financial services. DeFi currently operates alongside the traditional financial system, thriving where the traditional system is either inefficient, or expensive, for users. It is unclear whether DeFi and traditional finance will continue in parallel in the future, or merge.

Figure 1. The Decentralised Finance (DeFi) services becoming popular in Latin America

DeFi services

DeFi is constantly evolving, and new use cases will emerge in the coming years. Some use cases of DeFi already identified are decentralised stablecoins, exchanges, lending, derivatives, and asset management.

Payments are an important part of DeFi. Payment can be just with a cryptoassets such as Bitcoin, or they can change bitcoin to a traditional currency and vice versa. Some key areas of the decentralised payments ecosystem are (1) traditional fiat currency-to-crypto services on exchanges, (2) cryptoasset ATMs that exchange traditional currency for cryptoassets and vice versa, (3) cards allowing users to buy and spend cryptoassets, as well as receive them as rewards in loyalty schemes, (4) digital wallets that allow users to send, receive and store cryptoassets, enabling cheaper cross border payments, and (5) both e-commerce and physical shops are increasingly accepting cryptoassets.

DeFi adoption in Latin America

The use DeFi is increasing dramatically, but despite this growth, the activity is very small relative to the use of commercial banks. Digital solutions are vital to overcoming the challenges associated with financial inclusion in Latin America. For example, mobile money use has grown significantly. As cryptoasset adoption in Latin America increases and users become more familiar with the decentralised ecosystem, activity will likely increase. There is a-lot of decentralised financial innovation in the region, such as cryptocurrencies, crypto mining, blockchain and NFTs, with consumers eager to learn more about this ecosystem. So far, Brazil, Argentina and Mexico have the highest adoption of DeFi among Latin American countries.

If you want to learn more about this important part of the cryptoasset ecosystem, you can read the fourth chapter of the report.


Proskalovich R., Jack C., Zarifis A., Serralde D.M., Vershinina P., Naidoo S., Njoki D., Pernice I., Herrera D. & Sarmiento J. (2023) ‘Cryptoasset ecosystem in Latin America and the Caribbean’, University of Cambridge – Cambridge Center for Alternative Finance (CCAF). Available from:

Dr Alex Zarifis

I am going to talk to you about the business models, and ecosystems, of cryptomining in Latin America. This is the third chapter in my report with the University of Cambridge, Judge Business School (Proskalovich et al. 2023). I have given a general overview of this report already, so I am just focusing on the chapter on cryptomining here.

The blockchain consensus mechanism used in Bitcoin, and some other cryptocurrencies, requires mining for the proof-of-work process. Mining, helps verify transactions and create new cryptoasset tokens. Activity from companies and individuals in this area can positively impact the cryptoasset ecosystem, by encouraging cryptoasset adoption, and providing an income stream.

Figure 1: The factors making Latin America popular for crypto mining

Cryptomining in Latin America happens in registered mining companies, mining pools, and so called ‘ant farms’. Mining pools are a form of cooperation in which people share the risks and returns from mining. ‘Ant farms’ are created by hobbyist that install mining equipment in a residential area.

Latin America has some characteristics that support cryptomining and allow miners to be competitive internationally. These features include relatively cheap electricity and renewable power resources, such as solar, hydro and geothermal. The electricity price is one of the most significant factors determining the profitability of cryptomining, and whether a country will become a cryptomining hub. Despite this, Bitcoin mining in this part of the world is still only a small part of the global mining volume.

The popularity of cryptomining varies across Latin American countries. Some of the leading bitcoin mining countries in this part of the world are Brazil, Paraguay, Venezuela, Mexico and Argentina. In addition to electricity prices, other determining factors are regulation, subsidies, climate, the level cryptoasset adoption, and the general state of the economy. Mining is not widespread in the countries of this region where cryptocurrencies are partially, or entirely, banned.

The crypto mining industry seems to be very sensitive to regulation and electricity prices, and does not appear to be as ‘sticky’ to a geographic location as other parts of the crypto ecosystem. Some miners even have their IT hardware permanently in shipping containers when they are operating, so they can transport it to another country relatively easily. Changes in how countries regulate crypto mining often have a knock-on effect. For example, when Venezuela made regulation stricter, some mining activity moved from there, to Brazil.

If you want to learn more about this part of the cryptoasset ecosystem, you can read the third chapter of the report.


Proskalovich R., Jack C., Zarifis A., Serralde D.M., Vershinina P., Naidoo S., Njoki D., Pernice I., Herrera D. & Sarmiento J. (2023) ‘Cryptoasset ecosystem in Latin America and the Caribbean’, University of Cambridge – Cambridge Center for Alternative Finance (CCAF). Available from:

A Non-Fungible Token, usually referred to by its acronym NFT, uses technology that involves data on a blockchain that cannot be changed after they have been added. Therefore, while they share similar blockchain technology with cryptocurrencies, the functionality is different.
NFT’s functionality enables them to be used to prove ownership of an intangible-digital, or tangible-physical, asset, and the associated rights the owner has.
The most popular practical application of NFTs for digital assets is proving ownership of digital art, virtual items in computer games, and music.
The unique features of NFTs are becoming increasingly appealing as we spend more of our time online. Despite this increased popularity there is a lack of clarity over the final form this digital asset will take. The purchasing process in particular needs to be clarified.
This research developed a model of the purchasing process of NFTs and the role of trust in this process. The model identified that the purchasing process of NFTs has four stages and each stage requires trust.
You see here in the figure, the four stages in the purchasing process on the left, and the trust required in each of these stages along the center. Finally, on the right you see that trust in all four stages leads to trust in an NFT purchase.

Figure 1. Model of consumer trust at each stage of the NFT purchasing process

The four stages of the purchase are: First, set up a cryptocurrency wallet to pay for the NFT, and to be able to receive it. Second purchase cryptocurrency with the cryptocurrency wallet, third use the cryptocurrency wallet to pay for an NFT on an NFT marketplace and finally, there is the fourth, after sales service that may involve returns, or some other form of support.
The model that is supported by our analysis identified four stages to trust: First trust in the cryptocurrency wallet, second trust in the cryptocurrency purchase, third trust in the NFT marketplace, and fourth trust in after-sales services and resolving disputes.

Zarifis, A. & Castro, L.A. (2022) ‘The NFT purchasing process and the challenges to trust at each stage’, Sustainability, vol.14, no.24:16482, pp.1-13. Available from (open access):

New research!

Central Bank Digital Currencies (CBDC) are digital money issued, and backed, by a central bank. Consumer trust can encourage or discourage the adoption of this currency, which is also a payment system and a technology. CBDCs are an important part of the new Fintech solutions disrupting finance, but also more generally society. This research attempts to understand consumer trust in CBDCs so that the development and adoption stages are more effective, and satisfying, for all the stakeholders. This research verified the importance of trust in CBDC adoption, and developed a model of how trust in a CBDC is built (Zarifis & Cheng 2023).

Figure 1. Model of how trust in a Central Bank Digital Currencies (CBDC) is built in six ways

There are six ways to build trust in CBDCs. These are: (1) Trust in government and central bank issuing the CBDC, (2) expressed guarantees for the user, (3) the positive reputation of existing CBDCs active elsewhere, (4) the automation and reduced human involvement achieved by a CBDC technology, (5) the trust building functionality of a CBDC wallet app, and (6) privacy features of the CBDC wallet app and back-end processes such as anonymity. The first three trust building methods relate to trust in the institutions involved, while the final three relate to trust in the technology used. Trust in the technology is like the walls of a new building and institutional trust is like the buttresses that support it.

This research has practical implications for the various stakeholders involved in implementing and operating a CBDC but also the stakeholders in the ecosystem using CBDCs. The stakeholders involved in delivering and operating CBDCs such as governments, central banks, regulators, retail banks and technology providers can apply the six trust building approaches so that the consumer trusts a CBDC and adopts it.

Dr Alex Zarifis


Zarifis A. & Cheng X. (2023) ‘The six ways to build trust and reduce privacy concern in a Central Bank Digital Currency (CBDC)’. In Zarifis A., Ktoridou D., Efthymiou L. & Cheng X. (ed.) Business digital transformation: Selected cases from industry leaders, London: Palgrave Macmillan, pp.115-138.

Dr Alex Zarifis

This report offers a balanced analysis of the opportunities, and challenges, caused by the many moving parts of the cryptoasset ecosystem in Latin America and the Caribbean. I am happy to have contributed to this as one of the co-authors. I found it particularly interesting how some countries want to lead in the adoption of cryptoassets while others want to be more cautious. The countries that lead believe in their ability to regulate cryptoassets and manage any risks that emerge. They want to have first mover advantage. Other countries do not believe being an early, enthusiastic, adopter is worth the risks, and prefer to wait until the industry and the regulation mature. Both approaches are valid, but in both strategies it is important to follow developments closely. This is where this report can be helpful in gaining insights into this sector’s development, market trends, challenges and opportunities, as well as regulatory and policy issues.

The cryptoasset sector has grown across Latin America and the Caribbean in recent years and this expansion has led to increased employment opportunities. Many cryptoasset firms are now full-service fintech providers. The regulatory views on digital assets have shifted, with around a third of public sector respondents being more positive towards cryptoassets. The private sector participants are also more positive now, and they collaborate more with regulators through innovation hubs and sandboxes. The private sector respondents also see growth opportunities in DeFi services and onboarding corporate clients.

However, there are also challenges to address with the most important one being the lack of regulatory clarity. Public sector respondents believe they need more expertise in cryptoassets.


Proskalovich R., Jack C., Zarifis A., Serralde D.M., Vershinina P., Naidoo S., Njoki D., Pernice I., Herrera D. & Sarmiento J. (2023) ‘Cryptoasset ecosystem in Latin America and the Caribbean’, University of Cambridge – Cambridge Center for Alternative Finance (CCAF). Available from:

Dr Alex Zarifis

My new research developed a model of trust in making payments with the Ethereum (Zarifis, 2023). I published the first peer reviewed research on trust in payments with Bitcoin in 2014 (Zarifis et al. 2014), and I wanted to apply my experience from that to understanding the consumer’s perspective to making Ethereum payments.

Ethereum is being utilised in various ways, including smart contracts and payments. Despite some similarities with Bitcoin, Ethereum is a different technology, with different governance and support.

Ethereum payments require digital wallets and the process is different to paying in traditional fiat currencies like the Euro. When a person wants to take an action without controlling all the parameters, and some risk is unavoidable, trust is necessary.

Figure 1. Model of trust in making Ethereum payments, TRUSTEP

The model demystifies how trust is built in consumer payments with Ethereum. The model starts with the individual’s predisposition and then covers the factors from the specific context of Ethereum payments. From the person’s individual characteristics, their willingness to innovate in finance and technology have a role. There are then five variables from the contexts: Adoption and reputation, stable value and low transaction fees, effective regulation, payment intermediaries and trust in the seller. The personal and contextual factors together influence trust in the Ethereum payment process and making a payment with Ether.

While the model has similarities to previous models of trust, such as the role of each individual’s psychological predisposition and the role of reputation, the role of institutions such as regulators and the importance of trust in the retailer, the distinct characteristics of Ethereum also play a role. In fact, the factors related to the distinct characteristics of Ethereum have the strongest support based on the average of the responses. This research can be added to a growing body of research in trust that illustrates how users’ beliefs in each cryptocurrency need to be explored separately.

Furthermore, the role of the organizations involved in the payment process are shown. While trust in the retailer is usually a factor in retail payments, the regulators and payment intermediaries are not always a significant factor, so it is a useful contribution to show that this is the case here.

That is what I want to share with you here. If you have experiences related to what I am talking about, please let me know, I would love to hear from you.


Zarifis A. (2023) ‘A Model of Trust in Ethereum Token ‘Ether’ Payments, TRUSTEP’, Businesses, vol.3, no. 4: pp.534-547. Available from (open access):

Zarifis A., Efthymiou L., Cheng X. & Demetriou S. (2014) ‘Consumer trust in digital currency enabled transactions’, Lecture Notes in Business Information Processing-Springer, vol.183, pp.241-254. Available from: