High inflation and authoritarianism have put Venezuela in a constant sweet spot for a national cryptocurrency model. Whether it's to defend against a collapsing Bolivar or to escape Nicolás Maduro's strict regime, technologists see the country as the best case for a major. Bitcoin and digital asset adoption.
But according to a recent report by Chainalysis, Venezuela ranks fifth in the Latin American region for the total value of crypto received — and doesn't even rank in the top 20 worldwide. what's going on?
The final section of the report, the 2023 Global Cryptocurrency Adoption Index; Focused on Latin America. In it, Venezuela drew attention to the “unique utility of crypto,” citing the aforementioned political situation along with the country's notorious inflation.
b Javier BastardoOrganizer of Satoshi in Venezuela, the largest grassroots Bitcoin group in the country and the Bitcoin ambassador of Bitfinex in Latin America, these numbers really do not surprise him.
He pointed out a fact that Bitcoiners may not want to read: Venezuelans are more interested in the international reserve currency.
“People want to earn dollars,” he said. Decrypt, Over the years, he explained, the country has been “internally moving towards a de-facto dollar economy.” Bastardo added that the narrative that highly inflated countries will move to bitcoin out of necessity is simply not true — in fact, people are finding it more likely to use it. A stable coin Before the above cryptocurrency.
That said, Bastardo suggested that the stablecoin would only be used as a middle ground in Venezuela's efforts to access the US dollar.
His attitude was similar to that of Kevin Hernandez, who is also known as Kevin businessWho is the founder of the Venezuelan media Cryptodemia and the author of “My first days in Bitcoin”.
“Venezuelan people don't want cryptocurrency per se,” he said. Decrypt“Instead, they're looking to earn dollars.”
Hernandez added that the real economic instability that is plaguing the country will only provide demand for “low-friction” products like Zinli, which will allow easy access to dollars.
Chainlessis points to the second factor driving Venezuela's crypto-economy: the regime's regime. “The most unique use case for crypto in Venezuela is to enable citizens to resist the repression of the Maduro regime,” the report said, citing opposition leader Leopoldo López as a recent example of the technology's use. .
Lopez talked about using crypto to fund 65,000 doctors during the Covid-19 pandemic and how digital assets have served as a tool of resistance to the regime.
Bastardo and Hernandez hint that this is a “half-truth.” They agree that crypto is an alternative to an economy controlled by an iron fist (as Hernandez said Decrypt), but its use in the population is low.
“People are looking for dollars,” he said.
To emphasize the point, Bastardo mentioned that 92.5% of people in the Chainalysis report use a centralized exchange for crypto. “It might be a contradiction,” he said. Decrypt“But people want something simple where they can easily earn a dollar.”
The 92.5% turnover is part of another surprising finding in Chinalysis' latest report: Latin America is dominated by centralized exchanges, with more than 60% of people using them, compared to a global average of 48%.
Jazmin Jorquera, Chief Operating Officer of Buda.com, an exchange operating in Argentina; Chile, Colombia and Peru were not surprised by these numbers. “They offer a simpler and simpler experience, better fluidity, and overall confidence that can't be beat,” she said. Decrypt.
She pointed to the general level of criminality on the continent, and said that “there is a risk of using platforms like peer-to-peer”. “People don't want to carry around a lot of cash,” added Jorkera.
The latter points directly to Venezuela, the country He saw Citizens use money to pay for coffee.
Mexico is an exception to the regional dominance of centralized exchanges, falling two percentage points below the global average.
Founder of the Bitcoin Embassy Bar in Mexico City and Fed Community Master Lorena OrtizHe explained that the country is developing with technology, intelligent youth and various platforms that serve the country.
Why Latin Americans use centralized exchanges more often, Ortiz said. Decrypt It is two way. “Its simplicity brings a lot of use,” she said, and the second is crypto's tax framework.
“We don't pay as much tax as other parts of the world,” she said, because much of the industry is unregulated. “This means that most Latin Americans do not bother to use these centralized platforms.”
