Cryptocurrencies are becoming a core part of the economy in Venezuela as citizens turn to digital assets to shield themselves from a collapsing currency and tighter government controls.
From small family stores to large retail chains, shops across the country now accept crypto through platforms such as Binance and Airtm. Some businesses even use stablecoins to pay employees, while universities have begun offering courses dedicated to digital assets.
“There’s lots of places accepting it now,” shopper Victor Sousa, who paid for phone accessories with USDt (USDT), told the Financial Times. “The plan is to one day have my savings in crypto.”
Venezuela ranked 13th globally for crypto adoption, according to the Chainalysis 2024 Crypto Adoption Index report, which noted a 110% increase in usage in the year.
Related: Venezuela blocks Binance, X amid presidential election dispute
Bolívar’s crash pushes Venezuelans into crypto
The continued slide of the bolívar currency has intensified demand for crypto. Since the government stopped defending the currency in October, it has lost more than 70% of its value. Inflation reached 229% in May, according to the Venezuelan Finance Observatory (OVF).
“Venezuelans started using cryptocurrencies out of necessity,” said economist Aarón Olmos. He noted that they face inflation, low wages, foreign currency shortages and difficulty opening bank accounts.
However, access is not always smooth. With US sanctions on Venezuela’s financial sector, Binance restricts services linked to sanctioned banks and individuals. Connectivity issues also hinder widespread use. Still, experts say the ecosystem is resilient, per the FT report.
The government’s stance on crypto remains inconsistent. Venezuela launched its own digital currency, the petro, in 2018, but the project collapsed last year. The main exchange regulator was shut down in 2023 following corruption allegations tied to oil-linked transactions.
Cointelegraph reached out to Binance for comment, but had not received a response by publication.
Related: Venezuela opposition’s Bitcoin reserve plan must overcome political turmoil first
Crypto remittances surge in Venezuela
As Cointelegraph reported, crypto remittances have become a crucial lifeline for Venezuelans as the country’s economy sinks deeper into crisis. In 2023, digital assets made up 9% of the $5.4 billion in remittances sent home, about $461 million.
Families are increasingly relying on cryptocurrencies over traditional services like Western Union, which are weighed down by high fees, delays and currency shortages.
Meanwhile, military tensions are rising between the US and Venezuela. On Tuesday, Venezuela’s defense minister announced the deployment of naval vessels and drones to patrol the country’s Caribbean coast following Washington’s decision to send an amphibious squadron of three warships, joined later by a missile cruiser and a nuclear-powered submarine, to the region.
The buildup comes after the Trump administration accused President Nicolás Maduro of working with cartels and expanded its pursuit of Venezuelan leaders, doubling the reward for Maduro’s capture to $50 million and offering $25 million for Interior Minister Diosdado Cabello.
Magazine: Can privacy survive in US crypto policy after Roman Storm’s conviction?