As a result of the economic crisis that Venezuela is going through, citizens are turning to alternative methods to protect their finances from hyperinflation. In 2021, the Latin American nation entered the list of countries with the most visits to pages that exchange cryptocurrencies.
According to the report published by Chainalysis, an international firm specialized in blockchain analysis, Venezuela is the seventh country with the highest adoption of this type of digital assets. Furthermore, with semi-official dollarization, the number of visits to cryptocurrency exchange web portals, such as LocalBitcoins and Binance, increased by 300%.
“It is difficult to know, due to the devaluation of the bolivar, if a higher percentage of the purchasing power of Venezuelans actually it is moving towards cryptocurrencies even as commercial activity has increased, ”the document details.
In 2013, when the country began to open up to this market, barely 1,248 dollars were traded in bitcoin. Subsequently, it reached the peak of $ 303 million in 2019. Already in 2020, the figure reached $ 246 million, according to data from the Local Bitcoins portal. And in the last month of 2021, 3,179.99 bitcoins were exchanged, equivalent to 138 million dollars.
Also the Venezuelans turn to games like Axie Infinity, PlantsVsUndead or Cryptomines to generate extra income, even exceeding their average salaries. Likewise, more and more businesses accept cryptocurrencies as a payment method, despite the country’s poor electrical infrastructure and the irregularity of the internet service.
Cryptocurrencies and the Venezuelan State
Unlike other governments in the region, Nicolás Maduro’s administration has welcomed the cryptocurrency market. In fact, Venezuela is the first Latin American country with its own cryptocurrency, known as Petro.
In 2017 the National Superintendency of Cryptocurrencies and Related Activities (Sunacrip) was created. The purpose of this entity is to regulate and regulate all activities related to crypto assets in the country.
On January 30, 2019, the law on the Comprehensive Crypto-Assets System came into effect. With this decree, a series of regulatory measures were established, with the aim of incorporating blockchain technology and crypto assets into Venezuelan economic activity.
In addition, as the electrical service is subsidized and practically given away, both individuals and companies have installed their machinery in Venezuela to mine cryptocurrencies. According to Providence 084-2020, published by Sunacrip, it is necessary to obtain a license and permits for the hosting of mining farms.
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Expectations for 2022
Aarón Olmos, an expert economist in cryptocurrencies, estimates that the use of digital assets will continue to increase in 2022. In an interview for Digital Finance , the CEO of Olmos Group Venezuela highlighted that companies such as Binance, CryptoBuyer, LocalBitcoins and LocalCrypto are interested in the Venezuelan market.
“In the case of Venezuela, an interesting market has been created for crypto assets such as Bitcoin. Also for stable cryptocurrencies, such as USDT (Tether), USDC, BUSD and DAI. Likewise for the SLP tokens and all those that come from games on the NFT platforms and whose prices are competitive, ”said the Venezuelan economist.
In his opinion, in addition to economic, social and political reasons, the use of cryptocurrencies in Venezuela will continue thanks to acceptance by users. “The use of these digital assets has shown that they can be used as a means of payment that does not depend on the economic policies of the country,” he said.
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