As citizens turn to digital assets to hedge against currency collapse and increased government control, cryptocurrency is becoming a core component of Venezuela's economy.
From small family shops to large retail chains, stores across the country are now accepting cryptocurrencies through platforms like Binance and Airtm. Some businesses even use stablecoins to pay employee salaries, and universities have begun offering courses specifically focused on digital assets.
"There are many places that accept it now," shopper Victor Sousa, who bought mobile phone accessories with USDT, told the Financial Times. "The plan is to one day put all my savings into cryptocurrency."
According to Chainalysis's 2024 Cryptocurrency Adoption Index report, Venezuela ranks 13th globally in cryptocurrency adoption, with usage increasing by 110% over the past year.
The continued decline of the Bolívar currency has intensified the demand for cryptocurrencies. Since the government stopped defending the currency in October, it has depreciated by more than 70%. According to data from the Venezuelan Financial Observatory (OVF), the inflation rate reached 229% in May.
"Venezuelans have started using cryptocurrency out of necessity," economist Aarón Olmos said. He pointed out that they face issues such as inflation, low wages, foreign exchange shortages, and difficulties in opening bank accounts.
However, access channels are not always smooth. Due to U.S. sanctions on Venezuela's financial sector, Binance has restricted services related to sanctioned banks and individuals. Connectivity issues have also hindered widespread use. Nevertheless, experts told the Financial Times that the ecosystem is resilient.
The government's stance on cryptocurrency remains inconsistent. Venezuela launched its own digital currency, the Petro, in 2018, but the project collapsed last year. Major exchange regulators were shut down in 2023 due to corruption allegations related to oil transactions.
Cointelegraph reached out to Binance for comment but had not received a response by the time of publication.
As Cointelegraph reported, as the country's economy plunges deeper into crisis, cryptocurrency remittances have become a vital lifeline for Venezuelans. In 2023, digital assets accounted for 9% of the $5.4 billion in remittances sent home, approximately $461 million.
Families are increasingly relying on cryptocurrencies instead of traditional services like Western Union, which are burdened by high fees, delays, and currency shortages.
Meanwhile, military tensions between the U.S. and Venezuela are escalating. On Tuesday, Venezuela's Defense Minister announced the deployment of naval vessels and drones to patrol the country's Caribbean coast, following Washington's decision to send an amphibious squadron of three warships to the region, with an additional missile cruiser and a nuclear submarine joining later.
This military buildup comes after the Trump administration accused President Nicolás Maduro of collaborating with cartels and intensified the hunt for the Venezuelan leader, doubling the bounty on Maduro to $50 million and offering a $25 million bounty for Interior Minister Diosdado Cabello.
Related: Based on record liquidity and institutional adoption, Bitcoin (BTC) is set to rise to $190,000.
Original article: “Venezuela's Cryptocurrency Adoption Surges to Hedge Against Inflation and Currency Collapse”
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