Welcome to Latam Insights Encore, a deep dive into the most relevant Latin American economic and cryptocurrency news from the past week. In this edition, we discuss how bitcoin is being used by both the opposition and the government in Venezuela, while also highlighting one of its most important features: censorship resistance.

Latam Insights Encore: Venezuela Situation Shows Bitcoin’s Utility

The post-election situation in Venezuela, where President Nicolas Maduro was declared the winner by the National Electoral Council and then ratified by the Venezuelan Supreme Court, while the opposition contested the result, shows how useful Bitcoin can be for each side in the conflict, effectively becoming “rebel money”.

Recently, Maria Corina Machado, the head of the opposition to Maduro’s victory, proposed the creation of a bitcoin reserve fund for the country, which would be held alongside other reserves like El Salvador currently does. In an interview with Human Rights Foundation CSO Alex Gladstein, where she praised the opportunities that bitcoin has brought to some Venezuelans, Machado also started a joint campaign to solicit donations to support her claim.

Machado claims that her campaign is completely bank-free, and in her own words, she has emphasized the usefulness of bitcoin to her peace efforts on the ground. She states:

Fortunately, unlike bank transfers, which the regime often blocks, Bitcoin donations cannot be confiscated. Use this technology to bring about the change Venezuela so desperately needs.

This censorship resistance is one of the key features of bitcoin, which can support use cases like the one the opposition is mining in Venezuela.

At the same time, however, Maduro's government has also embraced cryptocurrencies, leveraging stablecoins as a payment method for crude oil shipments as part of a new system that PDVSA has used to evade some sanctions since at least 2023, according to some reports. Even if Tether claims to remain under sanctions from the Office of Foreign Assets Control (OFAC), this could be difficult because the companies involved in this trade will leverage various intermediaries to sign off on these shipments.

What do you think about Bitcoin's role in the current situation in Venezuela? Let us know in the comments below.
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