Crypto adoption is growing in Argentina, with a correlation between stablecoin use and the devaluation of the country’s currency, according to a new report. 

Research released Wednesday by blockchain data firm Chainalysis showed that Argentina’s stablecoin use is among the highest in the region, with the South American country’s share of stablecoin transaction volume at 61.8% of all crypto transactions—higher than Brazil’s 59.8%. Only Colombia landed higher at 66%.

The reason for Argentina’s surging use of such assets, according to Chainalysis, is that people in the country—which has one of highest rates of inflation in the world—are using stablecoins to get exposure to U.S. dollars. 

“[Argentines’] interest in stablecoins highlights the role of crypto in unstable markets and how citizens are able to take better control of their financial futures by embracing cryptocurrency, regardless of official monetary policy,” the report said.

It added that the Argentine peso’s decreasing value regularly led to an increase in stablecoin trading on crypto exchanges. 

Stablecoins are cryptocurrencies with a relatively fixed price that are typically pegged to a fiat currency—often the US dollar. They typically work by a private company issuing digital tokens, on a number of major blockchains, and then holding greenbacks in reserves to back them. 

They are also the backbone of the crypto economy: The 24-hour trading volume of the two biggest stablecoins—Tether and USD Coin—is much higher than Bitcoin’s, CoinGecko data shows. This is because the digital tokens can be used to enter and exit trades seamlessly without having access to a traditional bank. 

The Argentine economy is a mess: Argentina’s inflation rate in the 12 months through August stood at 236.7%, data from the country’s central bank shows, and over half of the population lives in poverty. While there are signs that inflation is cooling, the impact from the last year is still rocking the economy.

Argentina last year elected libertarian economist Javier Milei as President. The firebrand populist promised to sort out the country’s finances and previously spoke about his interest in Bitcoin. 

Chainalysis’ report also noted that in Venezuela, another country suffering from hyperinflation, citizens are also using cryptocurrencies to hedge against the country’s economic crisis. The country received—or bought using a centralized exchange—the largest amount of cryptocurrency of any other nation in the region, the report said.

Edited by Andrew Hayward