As the Venezuela economy continues to endure an inflation crisis, more and more businesses now have started accepting crypto. From June 1’st as per the earlier reports shared, over 20,000 shops and enterprises in Venezuela have reportedly started accepting crypto. In terms of crypto volume, Venezuela leads the game, but out of the Latin American nations, it dominates in terms of retail crypto transactions.
In a recent study, it came into notice that Latin America has captured 7% of the entire global cryptocurrency economy. Out of that Mexico was leading the roost with almost 11% of retail crypto payments since 2019. El Economista cited research by Daniel Cartolin, a development representative from the blockchain analytics firm Chainalysis showcased that the region received $24 million in retail crypto transactions. It also has sent $25 million to other continents over the past year.
The research representative of the study pinpointed that the remittances and trade are portions of sectors with a huge presence in retail crypto transactions within Latin America. The country has strong ties of trade and diplomacy with both North America and Asia. This has made the flow of retail transactions possible as per the study. Most of these transactions that took place were also notably performed using Bitcoin (BTC).
Cartolin also said in a statement that crypto is often used for remittances throughout Mexico:
“Remittances in the traditional world are substantial between the United States and Mexico, and we are beginning to see areas where cryptocurrency is beginning to be adopted for remittances, because there are fewer fees when it comes to exchanging cryptocurrencies and the person does not have to go to sites like Western Union or Moneygram to do the operation, it can be done from a phone.”
Even though Mexico has been leading by example when it comes to retail crypto transactions, Venezuela is the leader in Latin America in terms of crypto adoption especially now in the month of September. Venezuela’s hyperinflation rate hit 10 million percent at some point last year. This made it inefficient to store VES which is its local sovereign currency for longer than one day. Although the inflation slowed down, cryptocurrencies remain a stable medium of exchange.
Cryptocurrencies are now seen as something more convenient for everyday retail therapy in Venezuela compared to foreign fiat currencies. A popular opinion quoted:
“The use of cash like US Dollars is complicated by many times not having the necessary change at the time of a purchase forcing people to buy more products than they need is here where the use of cryptocurrencies is much more versatile in countries where payment systems are inefficient”
For a falling economy, cryptocurrency adoption is progressing in Venezuela despite facing roadblocks. Matt Aaron, the leader of Bitcoin.com explains,
Matt Aaron, leader of Bitcoin.com’s efforts in the country, explained how the recent political situation and ongoing power outages have affected local merchant crypto adoption.
“It’s really affected the crypto adoption. I think it’s still strong, it’s just that in the short term, they’re in survival mode in certain parts. But the willingness to learn about crypto has not gone down.”