By: Franklin Suarez
In a context of inflation and economic crisis, Venezuela has begun to abandon the use of the US dollar in favor of cryptocurrencies, a decision that reflects the desperate search for financial solutions by its citizens. As the Bolivar, the national currency, continues to devalue to the point where it now stands at 53 VES per dollar, cryptocurrencies, especially stablecoins, have emerged as a viable alternative for many Venezuelans.
The purchasing power of citizens has been severely affected. In November 2024, inflation soared by 12.5%, meaning that a salary paid in bolivars loses its value in less than a month. In this context, the dollar has become increasingly inaccessible for daily transactions, leading Venezuelans to seek refuge in cryptocurrencies.
According to a report by Chainalysis, cryptocurrency transactions in Venezuela increased by more than 110% in 2024 compared to the previous year, reaching an estimated flow of $20 billion. This volume represents a significant portion of the country's Gross Domestic Product (GDP), indicating that the adoption of cryptocurrencies is not just a passing trend, but an urgent necessity for the financial survival of many.
For those who do not know, stablecoins, which are cryptocurrencies designed to maintain a stable value by being linked to assets like the dollar, have gained significant popularity, representing almost half of all cryptocurrency transactions in the country, offering users a way to protect themselves against the volatility of the Bolívar (fiat currency in Venezuela).
For many, these digital currencies, USDT and USDC being the most popular, have become a safe haven, especially for receiving international remittances, a crucial source of income for numerous families.
Stablecoins, which represent almost half of cryptocurrency transactions in the country, are especially popular. According to the Dan Cartolin report, an executive of Chainalysis for Latin America, these digital currencies offer a hedge against the volatility of the bolívar, making them the preferred option for receiving international remittances, a vital source of income for many Venezuelan families.
However, small businesses and SMEs are forced to 'accept cryptocurrencies', thus the world of the cryptocurrency economy thrives.
The most commonly used cryptocurrencies, such as Bitcoin (BTC), Ethereum (ETH), and Tether (USDT), are employed for all kinds of transactions, from purchases and sales to money transfers and payments.
The government's 'laissez-faire' approach has allowed cryptocurrencies to flourish as an informal financial system, providing citizens with an alternative to traditional banking channels.
It is important to remember that cryptocurrencies are high-risk assets.
