Amid the severe economic challenges and hyperinflation facing Venezuela, a new report from Chainalysis offers insights into the nation’s cryptocurrency usage patterns. Contrary to the popular belief that citizens might flock to Bitcoin in the face of a depreciating bolívar, Venezuela ranks only fifth in total crypto value received within Latin America and isn’t even among the top 20 worldwide.
The 2023 Global Cryptocurrency Adoption Index, focusing on Latin America, spotlighted Venezuela for its “unique crypto utility,” driven by political unrest and rampant inflation. Yet, Javier Bastardo, a prominent figure in the Venezuelan Bitcoin community, reveals a different story: Venezuelans primarily seek access to dollars. The common perception that hyperinflated nations would automatically turn to Bitcoin seems misaligned with reality. In fact, Venezuelans are more inclined towards stablecoins as a bridge to securing U.S. dollars.
This sentiment is echoed by Kevin Hernández, founder of Criptodemia. While acknowledging the potential of cryptocurrency as a tool to resist authoritarian regimes, both Hernández and Bastardo agree that its current widespread use in Venezuela is overstated. The primary goal remains: acquiring dollars.
Furthermore, Chainalysis found a surprising trend: 92.5% of Venezuelans use centralized exchanges to access crypto. This aligns with a broader Latin American trend where over 60% use centralized platforms, compared to the global average of 48%. Jazmín Jorquera of Buda.com attributes this preference to the platforms’ simplicity, better liquidity, and trustworthiness, especially given the risks associated with peer-to-peer platforms in regions with high criminality.
Interestingly, Mexico emerges as an outlier in the region, with its crypto users less inclined towards centralized exchanges. Lorena Ortiz, from the Bitcoin Embassy Bar in Mexico City, credits the nation’s tech-savvy youth and diverse platforms. She also highlights the appeal of crypto’s tax advantages in Latin America, as many countries in the region have lax regulatory frameworks.
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