Is Venezuela Abandoning Dollar For Digital Assets? Crypto Adoption Skyrocketed Over Past Year

As Venezuela continues to battle hyperinflation and economic instability, cryptocurrencies have emerged as a lifeline for many citizens.

With the country’s currency, bolivar, losing its value at an alarming rate and the US dollar becoming increasingly inaccessible for daily transactions, Venezuelans are turning to digital currencies—particularly stablecoins—as a means of financial survival.

On 30 December 2024, local media reported that, “cryptocurrency exchange network is gaining strength among Venezuelans seeking ease of transaction, receiving remittances and finding refuge from the devaluation of the bolivar.”

A quiet revolution in our lifetime

From Venezuela to China, crypto is a quiet rebellion against financial tyranny. Empowering individuals where freedom is rare.#Crypto #Freedom pic.twitter.com/exxf06ojeT

— Dark Pigeon (@LinkedInNFT) December 31, 2024

Crypto Adoption In Venezuela Skyrocketed Over Past Year

According to Chainalysis, crypto transactions surged by 110% in 2024 compared to the previous year, with an estimated $20 billion flowing into the Venezuelan economy via digital currencies. This figure represents a significant portion of the nation’s $100 billion GDP.

This surge is not merely a trend but a necessity for survival amid relentless hyperinflation.

In November 2024, inflation rose by 12.5%, further eroding the purchasing power of wages paid in bolivars.

For many Venezuelans, cryptocurrencies offer a semblance of stability in an otherwise chaotic economic environment.

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Stablecoins Account For Nearly Half Of Venezuela’s Crypto Transactions

According to Dan Cartolin, an Enterprise Account Executive at Chainalysis, stablecoins now account for nearly half of Venezuela’s cryptocurrency transactions. “Stablecoins are particularly popular because they offer a hedge against the volatility of the bolivar,” Cartolin explained. This makes them a preferred choice for daily transactions and cross-border remittances, which have become a critical source of income for many Venezuelan families.

Despite the decline in visible signs like “crypto accepted here” banners in Venezuelan businesses, the nation’s crypto economy is thriving beneath the surface.

Cryptocurrencies such as Bitcoin (BTC), Ethereum (ETH), and stablecoins like Tether (USDT) are being used for everything from receiving remittances to safeguarding savings against the devaluation of the bolivar.

Stablecoins, in particular, have gained significant traction due to their pegging to more stable fiat currencies like the US dollar.

Government Policies: A Tolerant Stance On Crypto

Venezuela’s government has adopted a complex relationship with cryptocurrency.

While President Nicolás Maduro initially promoted state-backed crypto projects like the Petro—a digital currency tied to Venezuela’s oil reserves—the initiative collapsed due to inefficiency and corruption.

Despite this failure, Maduro has recently expressed renewed interest in cryptocurrency as a potential tool for bringing foreign currency into the country.

Interestingly, while the government has cracked down on Bitcoin mining and imposed restrictions on certain crypto exchanges, it has largely tolerated unregulated crypto markets.

This laissez-faire approach has allowed cryptocurrencies to flourish as an informal financial system, providing citizens with an alternative to traditional banking channels that are often inaccessible or unreliable.

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Disclaimer

Crypto is a high-risk asset class. This article is provided for informational purposes and does not constitute investment advice. You could lose all of your capital.
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