Catenaa, Tuesday, December 31, 2024 – Venezuelans are increasingly turning to cryptocurrency to counter inflation and economic instability, replacing the US dollar with digital assets for transactions, remittances, and safeguarding value, according to a report by El País.
While the visible “crypto accepted here” signs have vanished from storefronts, the country’s crypto economy remains vibrant. Venezuelans are gravitating toward Bitcoin (BTC), Ethereum (ETH), and stablecoins like USDT as the national currency, the bolivar, continues to devalue. In 2024, cryptocurrency transactions in Venezuela accounted for an estimated $20 billion—20% of the nation’s GDP.
The government under President Nicolás Maduro has adopted a mixed stance toward crypto.
Despite tolerating unregulated exchanges as a source of foreign currency, Maduro’s earlier pro-crypto policies, including the state-backed Petro (PTR), were marred by corruption and ultimately abandoned. However, Maduro has recently signaled a renewed interest in cryptocurrency as blockchain adoption grows.
Chainalysis reported a 110% year-over-year growth in Venezuela’s crypto market in the second quarter of 2024, marking the fastest increase in the Latin American region. Stablecoins have gained traction, particularly for transactions under $10,000, providing a hedge against the bolivar’s volatility.
Despite its promise, Venezuela’s crypto landscape remains fraught with challenges, including regulatory uncertainty and fears of inadvertently facilitating illicit activities. Many exchanges struggle with erratic regulations, while local crypto service providers operate in a legal gray area.
As inflation climbed to 12.5% in November, the highest in 2024, the demand for crypto remains a critical financial lifeline for millions of Venezuelans.
