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Venezuelans Turn to Cryptocurrency During Worst Economic Crisis
As Venezuela battles its worst economic crisis, cryptocurrency remittances have emerged as a lifeline for citizens amid traditional financial challenges. With cryptocurrency remittances accounting for a substantial portion of household income, many in Venezuela are turning to digital currencies like Bitcoin and Ethereum due to lower fees and faster transactions than traditional methods.
According to Chainalysis data, cryptocurrency transactions accounted for a significant 9% of the $5.4 billion remitted to Venezuela in 2023, for a total of $1 million. Digital assets provide a more stable store of value than the inflation-prone bolivar.
Source:Catenalysis
Venezuela is currently going through an economic crisis with hyperinflation, food shortages and widespread poverty. As of 2023, over 7.7 million Venezuelans have become immigrants, fleeing the economic crisis, and this rush to immigrate has intensified reliance on remittances, with many using platforms like Binance and Coinbase to convert cryptocurrencies into stablecoins like Tether.
This trend is due to the growing use of digital assets to avoid fluctuations of the Venezuelan currency Polivar and overcome the restrictive measures of the authorities in traditional forms of foreign remittances. In addition, the high fees on each transaction and the long processing time have pushed many people to look for other services available in money transfer. T
The inherent advantages of cryptocurrencies, which are faster and require low-cost transactions, have attracted Venezuelan citizens to this craze. With no end in sight to the Venezuelan economic crisis, the chances of increased cryptocurrency adoption in the Latin American nation will only increase with time.
Read also: Maduro Evades Sanctions Using Cryptocurrency: Venezuelan Activists