Crypto usage in Venezuela
Today I had a chance to chat about the economic situation and crypto adaptation in Venezuela with a person recently coming from Venezuela.
I have read the news from time to time that People living in emerging markets with hyperinfluation such as Turkey, Venezuela and Agentina desperately need means other than the rapidly devalued local currency to keep their wealth. It is such a unique experience to hear face-to-face what has taken place in Venezuela. Below are some main take-away points for me.
- Historically only 1% population has access to banking system.
- People are only used to trade by cash - the local currency bolívar.
- Now bolívar is no longer used due to its hyperinflation issue.
- Instead people are trading using cryptocurrencies such as bitcoin, Etherum and Dash.
- There are popular mobile apps indicating which shops in Venezuela support what types of cryptocurrencies.
- It is illegal to trade by USD or any other foreign currency.
- Crypto mining was prohibited but not anymore.
- Crypto has a market price but often times people pay a lot more to obtain the basic living supplies such as food and water.
- People who never thought of leaving the country started crossing the boarder to Columbia and Brazil.
I couldn’t imagine what would have been the situation in Venezuela if crypto was not invented. Perhaps USD or Euro in spite of the existence of capital control law.