Recent data from VeneBloc pointed out that Venezuelans’ Bitcoin trading volume has jumped to the equivalent of $1.009 million in bolivars on April 17. There seems to be ever-increasing excitement about the cryptocurrency in Venezuela amid growing economic chaos, and the highest inflation rate in the world.
Individuals and businesses are swapping bolivars for cryptocurrencies in order to buy daily life necessities or pay their employees.
Venezuelan people sees the digital currency as a safe alternative in an economy where the government has enforced strict foreign exchange controls since 2003, combined with inflation rate that is running at an estimated 9000 percent just over the past calendar year.
Venezuelans often exchange altcoins against Bolivar through P2Ps services, like LocalBitcoins, a Finland-based exchange that allows users to transact cryptocurrencies on their own terms.
There are no official statistics on the number of cryptocurrency users in Venezuela, but according to some local-based brokerages the number has increased to more than 90,000 by the end of 2017.
Although cryptocurrencies have been prone to extreme volatility, the fluctuation is negligible compared to the devalued Bolivar, which depreciated recently to 845,000 unit against the US dollar on the black market.
Earlier this year, Venezuela’s government has issued its own cryptocurrency, Petro, which is allegedly backed by barrels of oil from the country’s crude reserves.
President Nicolas Maduro said that the newly-issued virtual coin will become legal tender for all government transactions within the next several months and claimed that the petro ICO has raised more than $5 billion. However, independent analysts argue the vast majority of frenzy surrounding PTR is either a scam or far too ambitious for its own good.
The state-backed cryptocurrency hit another snag last month as US authorities once more sounded the bell to remind American investors about the sanctions that the US maintain on the South American country.
The decision bars all people and companies subject to US jurisdiction from touching the petro, since it constitutes, in essence, a government debt issuance. Trump authorized the US Treasury Department to issue any necessary regulations to enforce his order.