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- Once the richest countries in Central America, bad policies destroy the economy
- Falling crude prices hit hard, leading to 1000% inflation
- Hyperinflation leads to wider crypto acceptance
A recent report from Chainalysis shows that Venezuela ranks third in the world for crypto adoption, according to Chainalysis metrics, behind Ukraine and Russia. . With the value of its national currency plummeting to the bottom, the nation is adopting assets.
How Venezuela Uses Crypto: The Numbers
It is common knowledge that Venezuela is a nation that uses cryptocurrencies among all Latin American countries. An economic crash precipitated by years of financial mismanagement and corruption has led the government to accept cryptocurrency for survival.
Venezuela was one of the wealthiest nations in Central America, with an economy buoyed by oil wealth. However, with a fall in crude prices, the nation was severely hit. Inflation reached double digits, and the value of its local currency fell steeply. Inflation, according to the IMF, has reached 1,000,000%.
Today the nation’s currency is worthless as paper and can hardly buy anything. The country is being led over the years by a leftist government which has aggravated the economic malaise. The country set up the CADIVI, an institution that regulates the distribution of Dollars. It led to a thriving black market that offers Dollars freely but at a premium.
The government policy of devaluing its currency and strict controls on the Dollar has sent the value of the national currency to the depths. Emergency measures like removing three zeros from its currency in 2008 and three more again ten years later in 2018 did not help hyperinflation. Today Venezuelans don’t have any other option but to spend their dollars.
Cryptocurrency usage soared
All these factors lead to a situation that was ideal for adopting cryptocurrencies that are not affected by any local events nor tied to the local government. Localbitcoins and Binance data confirm that the cryptocurrency platform is used widely to trade Bolivars or Dollars.
Andrew is a blockchain developer who developed his interest in cryptocurrencies while pursuing his post-graduation major in blockchain development. He is a keen observer of details and shares his passion for writing, along with coding. His backend knowledge about blockchain helps him give a unique perspective to his writing skills, and a reliable craft at explaining the concepts such as blockchain programming, languages and token minting. He also frequently shares technical details and performance indicators of ICOs and IDOs.
