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

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: