Venezuelans seeking refuge in crypto-currencies

Since Bitcoin first came on the scene 10 years ago, crypto-currencies have faced a lot of criticism. Some say that Bitcoin and other crypto-currencies are digital gold, while others accuse them of hiding money gained from drug and illegal weapon trafficking. But for one group of people, crypto-currencies are really very useful.

After suffering one of the worst periods of hyperinflation since World War Two, Venezuela has seen its currency rendered practically valueless. For example, a cup of coffee now costs 2,800 bolivars (28 cents), up from 0.75 bolivars 12 months ago, which is an increase of 373,233%, according to Bloomberg data. And that’s after a 2018 devaluation that knocked five zeros off the currency.

More than 3 million Venezuelans have left the country because vitally important goods have become unaffordable as well as crime has increased substantially.

As a result, many are turning to digital assets such as Bitcoin as an alternative to the Venezuelan bolivar. Taking into consideration that Bitcoin value has plunged from nearly GBP 15,000 in 2017 to less than GBP 3,000 now, it reveals how desperate people have become.

While Bitcoin may be volatile but the Venezuelan bolivar has been losing value much faster. Even the government has launched its own crypto-currency, the Petro, supposedly backed by oil, to provide a solution to the economic crisis. However, critics say that there is no evidence of anyone using it.


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