While Venezuela has been trying to keep itself afloat amidst an economic crisis, the cryptocurrency world has been keenly watching over for updates. A series of concurrent strategies are being applied to stabilize the country’s economy, from lopping five zeros off the bolivar to introducing new bills, from the name change to linking the new bolivar’s value to the national oil-linked petro cryptocurrency.
In an effort to offset the devaluation shock, the official rate for the currency will go from around 285,000 per dollar to 6 million while the minimum wage will be raised some 3,500%. Instead of 1.8 million old bolivars, the new minimum wage will be 1,800 sovereign bolivars as per the historic devaluation and changes to the currency.
Notably, Venezuela remains far above other countries in regards to bitcoin and cryptocurrency use. According to peer-to-peer exchange LocalBitcoins, the transaction volumes have been climbing since the onset of this year.
The citizens fear situation to worsen as oil production, effectively Venezuela’s sole industry is plunging into a shortage of equipment and technical expertise. Last month, the International Monetary Fund forewarned that the country’s economy is calculated to contract by around 18% in 2018 and the inflation is expected to reach 1,000,000%. Implying that Venezuela is facing one of the worst hyperinflationary crises in modern history.
Alejandro Werner, director of the IMF Western Hemisphere department, stated in an agency’s blog post:
“We are projecting a surge in inflation to 1,000,000 percent by end-2018 to signal that the situation in Venezuela is similar to that in Germany in 1923 or Zimbabwe in the late 2000’s.”
Citizen’s are struggling with the level of inflation so much so that even paying for everyday things is a task. Many are starting to opt bitcoin and cryptocurrencies as a resultant. One Venezuelan citizen, who wished to remain anonymous, said :
“Cash is almost useless as a method of payment,” “The biggest bill is 100,000 bolivars, which cannot be used to pay for anything. A small coffee is almost two million bolivars.”
Cash is only used to pay for public transportation, gasoline, and tolls. “It is chaos!”, according to the Caracas resident:
“While people are often keen to use alternative methods of payment, it is not easy to find stores that accept bitcoin or cryptocurrency as legally you only can accept bolivares. There are there are some places I know that accept the cryptocurrency Dash as a form of payment, however.”
Meanwhile, a Venezuelan whose family moved to Spain in 2004 due to the worsening economic situation, Randy Brito has been trying to educate people in the country about bitcoin via his non-profit organization BitcoinVenezuela.com. Brito said via a Reddit Ask Me Anything,
“I’ve been educating about bitcoin in Venezuela since 2012, in our website, in social media, with collaborators in the country who gave talks, supporting local groups teaching about bitcoin there, running campaigns, giving interviews, podcasts. Besides trying to educate about economics, fighting Socialism both in Venezuela and Spain.”
In response a Reddit user’s question, Brito said:
“We believe in turning BTC to a common medium of exchange in the country.”
Read more: Venezuelan Assembly Plans Central Bank of Cryptocurrencies to link Bolivar to Petro
Arshmeet Hora
The idea of expressing one’s views and reviews through words is beyond intriguing. What started as a creative let out has now become a passion and a profession for Arshmeet K Hora. In her own words ” with every word, every article that I write, my passion towards this medium has grown stronger.” Arshmeet covers latest crypto news and updates as well as what happening new revolving around Blockchain Technology.
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