Venezuela: political crisis pushes Bitcoin trading

6 years ago - Published in Fintech Land

According to a new DataLight study, the popularity of Bitcoin, the top-of-the-line cryptocurrency, has skyrocketed in Venezuela amidst the ongoing political turmoil. On Feb. 2, the trading volume on LocalBitcoins reached a brand-new peak of 17.33 bln Venezuelan bolivars, which equals roughly $5.2 mln.

Notably, Venezuela is also responsible for 20 percent of the LocalBitcoins traffic. As trading volumes are increasing, more people are visiting the exchange, with a 40 percent increase in January. It’s one of the most popular websites in the country that is being plagued with food shortages, political crisis, and riots in the street.

Other portals have also said that many citizens like the concept of cryptocurrencies and see it as a way to fix the economy in shambles. Venezuela is also in the middle of political controversy, one that involves incumbent President Nicolas Maduro and the US, Canada approved Juan Guido. Maduro was one of the mean reasons for the establishment of Petro and the Sovereign Bolivar.

For comparison, the country’s top stock exchange had a minuscule trading volume of $8,117 USD on Feb. 11, which signifies how much of a non-factor the bolivar has become here.

The rapid surge in trading volume comes amidst the news about the Venezuelan government imposing limits on cryptocurrency remittance services. U.Today reminds readers that President Nicolas Maduro has tried to push his own oil-pegged cryptocurrency (the Petro), which was supposed to shore up the country’s struggling economy, but his plan failed miserably.

The government of Nicolas Maduro recently began regulating the cryptocurrency industry. The decree enacting the country’s crypto regulations containing 63 articles was published in Official Gazette 41.575 at the end of January.

It establishes a comprehensive set of rules for all crypto-related activities in the country and installs the National Superintendency of Crypto Assets and Related Activities (Sunacrip) as the main regulator of the crypto space. The powers given to Sunacrip include the ability to audit all crypto businesses, to set the prices of cryptocurrencies in bolivars, and to legally confiscate mining equipment. In addition, the regulator is building a database of all crypto service providers in the country.

Latin America remains the stronghold of Bitcoin adoption. For instance, it’s the second market for Dash (DASH), whose white paper was blatantly copied by the Petro.