Venezuelans See Bitcoin as Alternative to Bolivar, Volumes Hit Record High

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.‎

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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.‎