Political and economic turmoil in Venezuela
The opposition National Assembly Speaker Juan Guaido organized a large-scale protest and called on the military to help him end the rule of Nicholas Maduro. The impact of recent political turmoil on the adoption of Venezuelan cryptocurrency has grown substantially. With the support of more than 50 countries, including the United States, Guaido declared himself the acting president of Venezuela, while Maduro insisted that he has been re-elected for the second six-year term. Maduro is still supported by a number of countries including Russia and China.
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During the years of free fall in their national economy, many Venezuelans have turned to cryptocurrencies. According to the opposition’s National Assembly, Venezuela’s annual inflation rate in the 12 months to November last year reached 1.3 million.
Two Venezuelan presidents: Nicolas Maduro (left) and Juan Guaido (right).
The current shortage of food and medical supplies has become the norm, and most Venezuelans are struggling to buy basic items, including food and toiletries. Although the Venezuelan people are very happy to adopt cryptocurrencies, there are still many challenges.
Encryption is still very powerful
Despite some obstacles, Venezuela's cryptocurrency adoption seems to adapt naturally to this recession. Matt Aaron, head of Bitcoin.com in the country, explained the impact of the recent political situation and continued blackouts on the use of cryptocurrencies by local merchants.
Because of political turmoil, heavy and long blackouts, and soaring prices of goods and services due to a shortage of basic necessities, Aaron acknowledged that “this does affect the adoption of cryptocurrencies.” But he stressed:
I think it's still very strong, but in the short term, in some cases their use is facing difficulties. However, the willingness to learn cryptocurrencies has not declined.
Women cooking during a blackout in Venezuela <br /> Despite political turmoil, Venezuelans continue to trade cryptocurrencies. In the over-the-counter market, Localbitcoins, trading volume for the week ending May 4 was 1,137 BTC, just slightly lower than the 1,228 BTC traded last week. Bitcoin cash data is not available on the platform, but Bitcoin.com will soon launch local Bitcoin cash for anyone to trade directly on BCH.
Localbitcoins' Venezuelan BTC trading volume
How cryptocurrencies help Venezuelans
Many people in Venezuela have found refuge in cryptocurrency. Carlos Hernández, a Venezuelan who lives in Ciudad Guayana, shared how cryptocurrencies saved his family. Citing hyperinflation, he revealed:
I do not own the official currency of the Venezuelan bolívars. I put all the money in Bitcoin. Leave it in Bolivar will be financial suicide.
Ricardo Carrasco is a Venezuelian who gets cryptocurrency from online freelancers. He recently left his country because of the constant blackouts that prevented him from working in Venezuela. On Wednesday, in the city of Merida where he lived, there was no electricity supply for five consecutive days in March after two days of the previous week.
“Over the years, the Venezuelan government has always insisted on currency exchange control and will not allow us to freely enter the international market,” Carrasco said. In addition, the United States has been using sanctions as a policy tool for dealing with Venezuelan government and individual activities for more than a decade. “Now the Trump administration has prevented us from further integrating into the world economy,” Carrasco said. “Cryptographic currencies are very valuable because they allow us to circumvent it… it is also an asset that can be valued.. …. If your minimum wage is less than $10 a month, if you have cryptocurrencies, you can see growth potential."
Maduro also seeks solutions in cryptocurrency
In order to solve his country's devastating economic problems, Maduro launched a new currency called oil last February, which he originally claimed was a cryptocurrency supported by oil. However, he later claimed that the oil coins were no longer fully supported by oil, but were also partly supported by gold, iron and diamonds. Skeptics claim that his plan is a scam that points to a few evidences, such as the lack of wallets to control oil and non-existent block explorers.
Despite this, the National Regulatory Authority and the related event regulator (Sunacrip), appointed by the Maduro government, have been selling petroleum coins at their headquarters and issuing savings certificates to buyers. Recently, Amberes Coin, an encrypted exchange authorized by Sunacrip, said that although there is no wallet or block resource manager, oil companies have been trading off-exchange on their platforms and on social media.
Sunacrip's Petro Savings Certificate released in April
In January, the Maduro government established a cryptocurrency, which was published in Official Gazette No. 41.575. Sunacrip writes on its website that it gives Sunacrip “as the highest regulatory entity in this matter and strengthens the entire initial ecosystem that has been formed since 2018, providing solid and confidence for oil and Venezuelan sovereign cryptocurrencies.” The agency immediately began to control the country's encryption activities and provided its own encrypted remittance service. Whether it is fraud or not, the petroleum coin represents the first time any government runs its own cryptocurrency and related services, thereby creating and legalizing the cryptocurrency.
The Maduro government has announced two additional encryption-related regulations – one on February 4 in the official gazette number 41.578 and the other on February 7 in the official gazette number 41.581.
Many non-profit organizations such as Airdropvenezuela are using cryptocurrencies to help those in need. The non-profit organization’s website states: “Venezuela’s banks are not used for remittances, payments or donations due to artificially manipulated government exchange rates,” claims
Venezuela needs better funding. Venezuela needs cryptocurrency. Ten dollars can help a family buy food, medicines and scarce imports.
Access to digital funds can help Venezuelans join cryptocurrencies, online freelance platforms, e-commerce, investment, donations and other revenue-generating networking opportunities," Airdropvenezuela said.
The project aims to send $1,000,000 in digital funding to 100,000 authenticated Venezuelan Airtm users who have logged into their accounts between November 27 and July 31. “The first 100k Airtm Venezuelan users need to be verified and log in to their account during the login period. Once we reach the equivalent of $1,000,000, the campaign period will be $10 for the payee,” the non-profit organization announced.
In addition to the US dollar, donations can also be made in a variety of cryptocurrencies, including BCH and BTC. They are sent directly to the Airtm wallet, connecting buyers and sellers to more than 200 banking networks and electronic money systems worldwide, including Venezuela.
The project's website shows that as of this writing, $273,668 has been raised and 62,541 users have been verified.
Airdropvenezuela funds and verified recipients
Airdropvenezuela clarified that a total of less than $10,000 in cryptocurrencies would be converted into dollars at the time of allocation. At the time of this writing, BCH has the highest income in non-profit organizations, followed by US dollars and Bitcoin. Bitcoin cash donations account for more than half of all donations.
On December 10 last year, Bitcoin CEO Roger Ver announced a BCH donation and the BCH donation was launched. “Since @Rogerkver announced yesterday that he will match the BCH donation, the total amount of funds raised has more than doubled. Congratulations to the BCH community for jumping to the first place in less than 24 hours,” Airtm sent a tweet. “The bigger the network effect of money, the more useful the currency becomes. This is a good way to develop a bitcoin cash network and help people in need,” Ver commented.
150 merchants shortlisted
More and more businesses in Venezuela now accept Bitcoin cash, thanks to an initiative by Bitcoin.com that allows them to easily complete the process. At the North American Bitcoin meeting in February, COO Mate Tokay announced the company's ambitious goal of joining 500 merchants a month to receive bitcoin cash.
Aaron confirmed that although Bitcoin.com has other projects indirectly related, his main concern is to let merchants accept BCH, elaborated:
We are focused on Caracas, and there are about 150 businesses so far… We are teaching them how to use Bitcoin cash, how to convert to US dollars and Bolivar, and show them the advantages.
He went on to outline the benefits of accepting cryptocurrencies for merchants such as instant transactions, accepting payments without a payment processor, and avoiding up to 6% of credit card processing fees. In contrast, using BCH to pay only generates network fees that are typically less than 1 cent.
The owner of Caracas accepts bitcoin cash. “We have a support network on Whatsapp and Telegram” so “the shopkeeper can ask us their questions,” Aaron continued, noting that the owner had a lot of questions about accepting bitcoin cash. He believes that this support structure distinguishes his efforts from other similar initiatives, emphasizing that the first step is to get merchants to accept BCH and then convince more people to use it and consider other projects, such as remittance payments. "So many things to do, we have just begun," he concluded.
To start accepting Bitcoin cash, shop owners simply download the Bitcoin.com wallet, which has been downloaded more than 4 million times. Merchants accepting BCH can be found on the Marco Coino map.
Help Venezuelans with cryptocurrencies
Another organization that relies on cryptocurrencies to help Venezuelans is Eatbch. The non-profit organization provides food for people in the six states of Venezuela through bitcoin cash donations and coordinated purchases of ingredients. Eatbch celebrated its first anniversary on February 11. The organization has similar initiatives in South Sudan.
During the power outage in Venezuela, Eatbch instructed donors to visit Venezuelan. Bitcoin.com for donations. Funds sent to Eatbch can be easily tracked using the Badger Wallet. BCH enthusiasts can also donate to businessmen in Venezuela. 100% of the donation funds will be used to help increase the country's bitcoin cash adoption rate by registering merchants and educating them on how to use diversified currencies for business and remittance payments.
The victory of the Venezuelan cryptocurrency war may best be described as a tough battle, but the local encryption community has learned a lot. No matter how political turmoil develops, most Venezuelans have learned how to maintain the value of their money. Now that cryptocurrency is known, it is mainly due to the efforts of the Maduro government to promote oil companies. Many of their lives are affected by these efforts and projects. It seems that the widespread acceptance of cryptocurrencies in the country is finally a matter of time. (chain to finance)