Crypto remittances are increasing in Venezuela as the economic situation worsens.
As the economic situation in Venezuela worsens, crypto remittances from family members living abroad have increased to support residents in the country who are struggling with constant inflation and supply shortages.
In the year Of the $5.4 billion remittances to Venezuela in 2023, 9% of cryptocurrencies will account for $461 million. Remittances to Venezuela have increased every year since 2018, except for 2020.
Money transfers are typically sent using services such as Western Union. However, issues of relatively high fees, waiting times, and financial availability make these services impractical for individuals who are growing stronger.
Venezuela's economic nightmare.
Despite having the world's largest proven oil reserves, Venezuela's economy continues to be plagued by persistent inflation, sanctions, supply issues and government corruption.
In the year In 2018, the Venezuelan government created a government-backed cryptocurrency called “Petro” to circumvent US sanctions against the energy-rich nation. Unfortunately, cryptocurrency has failed to gain widespread acceptance due to corruption and the lack of legal tender in the country.
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Even the Central Bank of Venezuela refused to accept the Petro and after six long years of the currency it was closed in 2024. But this did not stop the Venezuelan government from turning again to digital assets to avoid US sanctions.
Earlier this year, reports began to surface that the Venezuelan government was looking to use cryptocurrencies to facilitate international oil trade. In response, stablecoin issuer Tether announced it would freeze USDT assets held by Venezuela in compliance with US sanctions.
Ironically, the country also suffers from widespread power shortages. In May 2024, Venezuelan authorities announced a ban on crypto mining, saying they had put too much pressure on the country's power grid, which had been in trouble for the past 10 years.
Is the Maduro government hostile to mining?
The May 2024 ban on crypto mining was not the first time Venezuelan authorities have targeted mining operations and pursued anti-crypto policies.
In the year In 2023, the country shut down mining facilities amid an ongoing corruption investigation into Venezuela's oil industry and the head of the Secret Service, Joselit Ramírez Camacho.
Journal: Unstable Coins: Debasement, Bankruptcy and Other Risks Looming.
