Adoption of bitcoin picked up in South America (Venezuela)
South America is not immune to cryptocurrencies, digital currencies issued by private companies that are revolutionising the economy. Despite the obstacles imposed by different governments, such as Venezuela, Bolivia and Ecuador, Bitcoin is expanding in the region and gaining confidence among Latin Americans.
Myths and prejudices about the formalisation and support of the digital currency are added to the scammers that new entrepreneurship inevitably attracts. Even so, the potential is very encouraging in South America.
Bitcoin has become a financial tool that helps grow not only South America but the world through its advantages of unbanking. In the early years, people considered Bitcoin as a rare thing that nerds wanted to impose, but the opposite happened: seeing how easy to use cryptocurrencies are and seeing the advantages it represents when acquiring a good or service, people lost their fear, although not at all.
A healthy scepticism remained, but in comparison to the early times, people are no longer afraid of Bitcoin. They use it as an alternative to traditional financial services.
Argentina still suffers a lot today policies initiated in 2011 with the exchange rate. When an Argentine wanted to save for, let’s say a year, the peso was so devalued that at the end of that year the person ended up losing.
Bitcoin in Venezuela
Today, Venezuela is demanding many bitcoins, since the Venezuelan bolivar (VEF) is so devalued concerning the US dollar (USD) that, at the time of writing this article, 1 USD is worth 127.000 VEF. That is to say; the Government put such a significant dent in monetary policy that today the citizens are paying the consequences of terrible ineffectiveness.
The demand in Venezuela for bitcoins is very high because, as in Argentina, they are looking for not only a currency to which they can turn to save, but also to make remittances or make purchases abroad. They found the solution, but the Government of Nicolás Maduro persecutes those who use it or offer it publicly.
It is not false persecution. A few months ago, they arrested some Venezuelans who were mining bitcoins and confiscated their equipment, in addition to accusing them of criminals. Venezuelans found in the bitcoin a tool to overcome the economic crisis. Bitcoin’s value has risen steadily since the last decade and today it is quoted at US 18,879. That development is what has allowed thousands of people around the world to trade with the currency or dedicate themselves to creating and selling it, a process known as mining.
And this is where Venezuelans are becoming a power. Bitcoin is now a standard mode of payment in Venezuela. And now a lot of people in the country rely on cryptocurrencies to survive. Bitcoin transactions are relatively swift for anyone with a smartphone: Websites like LocalBitcoin function as exchanges where Venezuelans can buy and sell bitcoins
However, in addition to technological and infrastructure barriers in Latin America, internet users in the region face governmental restrictions. According to the 2013 Freedom on the Net ranking by Freedom House, internet in Venezuela is only “partially free”.
Nevertheless, this revolution of cryptocurrency has become so famous in Venezuela that even the President of that South American Nation, decided to create their own cryptocurrency called the Petro.