Bitcoin is This Venezuelan’s Savior as Residents Turn to Cryptocurrencies While Local Currency Nears Collapse
Were it not for cryptocurrencies, the brother of Carlos Hernández, a Venezuelan economist, would still be in the South American country. Juan, the brother, has digital currencies to thank for his successful escape from Venezuela.
In a piece published in the New York Times, Hernández disclosed that he keeps his savings in Bitcoin. This is because of the hyperinflation of the Venezuelan fiat currency, the bolivar. As of now, the daily inflation rate stands at 3.5%, translating to a whopping 1,700,000% per annum. Because of the stringent measures imposed on foreign currencies such as the US dollar, Carlos’s only resort is Bitcoin.
Indeed, many people in Venezuela appear to be following the approach taken by Hernández. In recent times, Localbitcoins has facilitated unprecedented trading volumes in the country. The only shortcoming is that transactions involving bolivars have limitations.
According to Hernández, he can't exchange a huge amount of bolivars into Bitcoin in a single transaction. This is because the government flags any transaction involving over $50 worth of Venezuelan bolivars. If you have more than $50 in Bolivar, your account is frozen until you give a plausible explanation over the origin of the money.
The ongoing humanitarian crisis in Venezuela has forced over 3 million citizens to flee the country. With the power battle between the opposition and the ousted government going on, it seems that the predicament is set to go on for some time.
Last week, embattled president Nicolas Maduro cut ties with neighboring Colombia and ordered all of their diplomats to vacate Venezuela within 24 hours. He also rejected their food aid and medical supplies intended for the victims of the ongoing fracas.
As per the New York Times, the chaos has been turning deadly. The reports indicate that there were two casualties after the police fired tear gas and live bullets at protesting civilians.