Venezuela turns to crypto as bolívar collapses and US tensions rise
Venezuela’s economic crisis has pushed cryptocurrencies into the mainstream, with digital assets now used for daily payments, employee wages, and even remittances.
As inflation surges and the bolívar loses more than 70% of its value since October, citizens are increasingly relying on platforms such as Binance and Airtm to preserve purchasing power.
The rise of crypto in Venezuela comes as the country faces tighter government controls, a collapsed state-backed token project, and renewed geopolitical tensions with the US, making digital assets both a survival tool and a flashpoint in the nation’s economic and political struggle.
Crypto adoption surges 110% amid bolívar crash
The collapse of Venezuela’s currency has accelerated crypto use across the country.
From small family-run shops to large retail chains, businesses are turning to stablecoins and decentralised platforms to carry out transactions.
Some employers even pay salaries in USDt (Tether), which has become a preferred medium for safeguarding income.
According to the 2024 Chainalysis Crypto Adoption Index, Venezuela ranked 13th globally for digital asset adoption, with usage rising 110% over the year.
The Venezuelan Finance Observatory (OVF) reported that inflation hit 229% in May, further eroding citizens’ ability to use the bolívar.
Since October, when the government stopped defending the currency, its value has plunged by over 70%.
Economists note that Venezuelans turned to cryptocurrencies “out of necessity,” given low wages, limited access to foreign currency, and restrictions in banking.
Access barriers, sanctions, and government failures
While adoption is strong, challenges remain. US sanctions on Venezuela’s financial system have forced platforms like Binance to restrict services connected to sanctioned banks and individuals.
Poor internet connectivity also creates obstacles for seamless transactions.
Despite these issues, the ecosystem has shown resilience, with peer-to-peer exchanges and mobile platforms playing a crucial role.
The government itself has struggled with digital currency initiatives. Its own oil-backed cryptocurrency, the petro, launched in 2018, was officially abandoned last year after widespread criticism and weak adoption.
The country’s main crypto regulator was dismantled in 2023 following corruption allegations tied to oil-linked transactions.
This left regulation uncertain, even as crypto adoption among the population surged.
Crypto remittances rise to $461 million
As Venezuela’s economy deteriorates, remittances from abroad have become a vital source of survival for many households.
In 2023, $5.4 billion was sent home, with cryptocurrencies making up 9% of that amount — equivalent to about $461 million.
Families are turning to digital assets because traditional providers like Western Union are hindered by high fees, delays, and shortages of available currency.
This shift highlights the dual role of crypto in Venezuela: both as a daily payment method in shops and as a cross-border tool for households cut off from traditional finance.
Rising military tensions with the US
Venezuela’s increasing reliance on crypto is unfolding alongside growing military and political tensions with the US.
On Tuesday, Venezuela’s defence minister announced the deployment of naval vessels and drones to patrol the Caribbean coast after Washington sent an amphibious squadron of three warships, later joined by a missile cruiser and a nuclear-powered submarine, to the region.
The buildup follows accusations from the Trump administration that President Nicolás Maduro is working with cartels.
The US doubled its reward for Maduro’s capture to $50 million and set a $25 million reward for Interior Minister Diosdado Cabello.
These escalations add further strain to Venezuela’s economic crisis, leaving cryptocurrencies as one of the few financial tools still accessible to many citizens.
The post Venezuela turns to crypto as bolívar collapses and US tensions rise appeared first on Invezz
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Venezuela turns to crypto as bolívar collapses and US tensions rise
Venezuela’s economic crisis has pushed cryptocurrencies into the mainstream, with digital assets now used for daily payments, employee wages, and even remittances.
As inflation surges and the bolívar loses more than 70% of its value since October, citizens are increasingly relying on platforms such as Binance and Airtm to preserve purchasing power.
The rise of crypto in Venezuela comes as the country faces tighter government controls, a collapsed state-backed token project, and renewed geopolitical tensions with the US, making digital assets both a survival tool and a flashpoint in the nation’s economic and political struggle.
Crypto adoption surges 110% amid bolívar crash
The collapse of Venezuela’s currency has accelerated crypto use across the country.
From small family-run shops to large retail chains, businesses are turning to stablecoins and decentralised platforms to carry out transactions.
Some employers even pay salaries in USDt (Tether), which has become a preferred medium for safeguarding income.
According to the 2024 Chainalysis Crypto Adoption Index, Venezuela ranked 13th globally for digital asset adoption, with usage rising 110% over the year.
The Venezuelan Finance Observatory (OVF) reported that inflation hit 229% in May, further eroding citizens’ ability to use the bolívar.
Since October, when the government stopped defending the currency, its value has plunged by over 70%.
Economists note that Venezuelans turned to cryptocurrencies “out of necessity,” given low wages, limited access to foreign currency, and restrictions in banking.
Access barriers, sanctions, and government failures
While adoption is strong, challenges remain. US sanctions on Venezuela’s financial system have forced platforms like Binance to restrict services connected to sanctioned banks and individuals.
Poor internet connectivity also creates obstacles for seamless transactions.
Despite these issues, the ecosystem has shown resilience, with peer-to-peer exchanges and mobile platforms playing a crucial role.
The government itself has struggled with digital currency initiatives. Its own oil-backed cryptocurrency, the petro, launched in 2018, was officially abandoned last year after widespread criticism and weak adoption.
The country’s main crypto regulator was dismantled in 2023 following corruption allegations tied to oil-linked transactions.
This left regulation uncertain, even as crypto adoption among the population surged.
Crypto remittances rise to $461 million
As Venezuela’s economy deteriorates, remittances from abroad have become a vital source of survival for many households.
In 2023, $5.4 billion was sent home, with cryptocurrencies making up 9% of that amount — equivalent to about $461 million.
Families are turning to digital assets because traditional providers like Western Union are hindered by high fees, delays, and shortages of available currency.
This shift highlights the dual role of crypto in Venezuela: both as a daily payment method in shops and as a cross-border tool for households cut off from traditional finance.
Rising military tensions with the US
Venezuela’s increasing reliance on crypto is unfolding alongside growing military and political tensions with the US.
On Tuesday, Venezuela’s defence minister announced the deployment of naval vessels and drones to patrol the Caribbean coast after Washington sent an amphibious squadron of three warships, later joined by a missile cruiser and a nuclear-powered submarine, to the region.
The buildup follows accusations from the Trump administration that President Nicolás Maduro is working with cartels.
The US doubled its reward for Maduro’s capture to $50 million and set a $25 million reward for Interior Minister Diosdado Cabello.
These escalations add further strain to Venezuela’s economic crisis, leaving cryptocurrencies as one of the few financial tools still accessible to many citizens.
The post Venezuela turns to crypto as bolívar collapses and US tensions rise appeared first on Invezz
Read More
Crypto industry pushes Senate to protect developers in $1.8 trillion digital asset bill