Posted 2 years ago | by Ben Armstrong
Cryptos Widely Used in Venezuela Amid Hyperinflationary Crisis
Venezuela has become a basketcase of a country with an unstable economy. Currently, as Venezuela's economy continues to suffer from hyperinflation, many businesses have expanded their use of cryptocurrencies.
It is estimated that more than 20,000 stores and businesses in Venezuela will accept cryptocurrencies starting on June 1. This news was made as part of an effort to promote the use of cryptocurrencies in a country that is in the grips of hyperinflation.
Venezuela was one of the first nations to issue a national crypto, called the 'Petro', but it has been widely derided as worthless. Much like the national fiat currency, the 'Bolivar', the Petro hasn't been able to convince many people that it has any value whatsoever.
Venezuela Should Probably Just Give Up on its Own Money
Cryptobuyer, which is a cryptocurrency startup based in Panama, announced a partnership with Venezuela's Mega Soft, which handles payments for thousands of local businesses through Its platform is called Merchant Server.
Dozens of cryptocurrencies will be accepted via the platform, including Bitcoin (BTC), Ether (ETH), Dash (DASH), Litecoin (LTC), Tether (USDT) and many other cryptocurrencies along with fiat. This platform is being aimed for national use, although the government of the nation may not be happy about the removal of its currency from use.
Merchants who are paid with cryptocurrencies and will be able to immediately take possession of the payments, which is a huge benefit of cryptos. Many merchant accounts hold onto the cash for a period of time, which is very dangerous in a hyper-inflationary environment.
Bitcoin is a Savior for Value
The hyperinflation rate in Venezuela reached 10 million percent at some point last year, making storing the local currency very silly. Although inflation has slowed down, cryptocurrencies are still a much more stable medium of exchange in Caracas, according to local reports.
Using cash like the US Dollar is complicated because it is difficult to make change for foreign currencies. Cryptocurrencies are much more flexible in countries where inefficient payment systems exist, and the risk of theft is very high.
As central banks take ever more radical actions to support a financial system that is clearly broken, it is likely that we will see a rise in situations like Venezuela. There is no way to create tens of trillions of USD without major consequences, despite the nonsense coming out of major central banks.
If you are interested in learning more about how to invest in cryptos, just click right here. Like any class of investment, it is best to make small allocations and let the position grow over time. You can choose to buy the tokens outright, or keep them with an exchange for ease of trading.