The Bolivar, the national currency of Venezuela, is taking more and more hits every day. The newest wave of hyperinflation is one of the countries biggest struggles with regards to containment, and there seems to be no stopping to the current currency troubles.
This has lead people to turn to alternative means to save their incomes from becoming useless the day they receive them – and to protect what little savings they have managed to scrounge together. When hyperinflation hit earlier, gold and other valuables were traded and kept as sources of wealth – but in these modern times, the people have turned to cryptocurrencies to safeguard their wealth.
Zeros are just a number to the central bank and Maduro
The central bank tried making the payment system more efficient by undergoing a financial overhaul with the highest value being a 500 bolivar banknote. However, after reaching a peak of 1.7 million percent inflation, the government had to add a few more zeroes (yet again) and now has 10 thousand, 20 thousand and 50 thousand bolivar notes.
The IMF itself estimates that hyperinflation will reach 10 million percent this year, even though official figures from the National Assembly of Venezuela report the figure to currently sitting at 1.7 million percent only. There are numerous cries from opposition leaders that say the numbers from the government are actually cooked and that the actual situation is far, far worse.
The situation used to be very different. Venezuela had a democratically elected government and was a massive exporter of crude oil. The people lived well, but these days those are all pipe-dreams. Bitcoin has replaced democracy and oil as the most stable asset to which they have instant access. To many, it is a sad indication of the times when a cryptocurrency is much more stable than your own national currency.
Stability is the least important thing about cryptocurrencies
While no one would ever say that cryptocurrencies are stable, them being more stable than the bolivar helps people better plan their futures. The most significant advantage of using a cryptocurrency is that a central authority does not control it. This is important as it was the control by a central authority that led to the mess in Venezuela.
The forex restrictions in place in Venezuela, where people are only allowed to process a transaction that is $50 or lower means that cryptocurrencies have another crucial reason for being used. They can be spent under the radar and without the knowledge of anyone in power trying to wrest away earning or savings.
Venezuelans are abandoning the country in droves — almost 3 million people since the trouble started in the country. These millions of people are all sending money back to family, and the best way they can do it is using cryptocurrencies, most notably Bitcoin. It is due to the lack of transaction fees and the immediate transfer of wealth to people anywhere in the world.
Cryptocurrency is best known for speed and price – pay nothing, use instant. That is precisely what people who send money to Venezuela need, and they are making excellent use of the benefits of digital currency.
Disclaimer: The presented information is subjected to market condition and may include the very own opinion of the author. Please do your ‘very own’ market research before making any investment in cryptocurrencies. Neither the writer nor the publication (TronWeekly.com) holds any responsibility for your financial loss.
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