Venezuelans are some of the most prolific bitcoin users in the world. As the country continues to deal with 14,000% inflation, bitcoin trading is surging across the country.
LocalBitcoin trading data reveals an incredible spike in bitcoin trading across the country. The graph of bitcoin trading for Venezuelan Bolivars over time looks like a straight vertical line: there was limited trading until 2018. Then, bitcoin trading skyrocketed.
Venezuela’s inflation rate has been leading the world for several years. Locals are increasingly turning to cryptocurrencies like bitcoin as a stable, reliable method of payment. Now, with inflation exceeding 14,000%, bitcoin usage in Venezuela shows no signs of slowing down anytime soon.
The government of Venezuela, meanwhile, is struggling to contain the extreme inflation. They recently devalued the currency by removing three zeroes from the national currency, the Venezuelan Bolivar. As prices run rampant, however, locals have abandoned the national currency and chosen alternative methods like bitcoin.
Reuters is reporting that Venezuela’s currency overhaul has been postponed two months to August 4. The move is designed to give Venezuela’s financial system more time to prepare for new bank notes and a new transaction system.
Nevertheless, critics are skeptical whether the government’s plans will have any effect on the inflation crisis. President Nicolas Maduro’s response to hyperinflation has had little meaningful impact. The International Monetary Fund, meanwhile, recently announced that they expect consumer prices to rise 14,000% by the end of 2018, leaving millions of Venezuelans scrambling to pay for basic necessities like food.
Venezuela has already announced plans to launch its own cryptocurrency. However, the problem remains the same: Venezuelans don’t trust the Venezuelan Bolivar to retain its value. This problem exists whether it’s a paper Bolivar or a crypto Bolivar. When locals don’t trust the government, another government-issued cryptocurrency isn’t going to change things.
In the meantime, bitcoin usage continues to rise across the country. Venezuela already has more bitcoin users per capita than virtually any other country in the world. Bitcoin usage has been rising since the currency crisis began – and it shows no signs of slowing down anytime soon.
Could Venezuela’s crisis be solved by using bitcoin as a national currency? Will Venezuela be forced to abandon the Venezuelan Bolivar and introduce a new currency? Could Venezuela become a failed state in need of international intervention? Stay tuned to discover how the world’s most prolific bitcoin users deal with this ongoing currency crisis.