Soon, there will be no Paxful services in Venezuela. The U.S. office of foreign assets control announced that they will no longer maintain their operations in Venezuela, because of the risks they had no other choice. The closure of Venezuela caused the restrictions of new account creation in the country. Also, the accounts that are already existing will be closed soon too. Current users will have 30 days to make money from their accounts before it will be finally closed. They will also get some instructions on how to do that in their email.
Recent data showed that Ukraine topped the Global crypto adoption index in 2020. That happened after Venezuela and Russia. Venezuela is a great example of a cryptocurrency adoption drive. The number of people who use cryptocurrencies in Venezuela is showing that Venezuela’s economy is in a bad place right now. Many users are sad about the fact that Paxful will be gone soon, but they think that it won’t stop the development of the digital revolution they are experiencing right now.
Venezuelans are having the highest trading frequencies in the P2P platform. This is related to the fact that the country has one of the highest inflation rates in the world. So much so that people aren’t even using the currency anymore because it’s useless. On the other hand, cryptocurrencies are largely used as a payment method and transferring since the big inflation in the country.
It was even believed that because of some US sanctions on attaining USD in the country, people would transfer cryptos to an online casino and just withdraw with USD on their other online wallets like PayPal to just have USD on them. According to this Kaboo review, not every casino has an option for BTC deposits and withdrawals, Which means that Venezuelans need to be much more careful on the platform they will choose. If they will be mistaken, not only would they face issues with the local government for gambling online with local money, but they will also have problems with the US for sort of illegally receiving the USD.
Can cryptos save Venezuela’s economy?
For many people in the troubled Latin American country of Venezuela Bitcoin and other digital currencies are providing a life-giving income. In Venezuela, Bitcoin and inflation are the most usable words because of their popularity among citizens. The country’s economy is going down since president Nicolas Maduro came into the government in 2013. As for now, Venezuela reached the lowest of the lows.
Inflation in Venezuela is expected to hit 200k% this year. That means that if the cup of the cappuccino was costing 150 bolivares in 2018, now it will cost 18k believers. This is a huge stress for the people because their quality of life is lowering and the unemployment rate is growing rapidly. If a teacher will get a paycheck with 2 million bolivars she\he can only buy some eggs and meat with it, nothing more. So, the circumstances in Venezuela are worse than a situation in a war.
Throughout the history of Venezuela, people have gone through many ups and downs. They already know how to recover from the stress but they are tired of it. They need changes and new approaches to make their lives better. This is why they are specifically trying out cryptocurrency and fintech.
Fintech and financial inclusion
The cryptocurrency is built on a decentralized electronic ledger called a blockchain, unlike regular money. It is not controlled by the central bank or ministry of finances. Millions of people are using them on their computers which can be cut off or restricted. With the political crisis, Venezuelans already don’t trust the government. They are looking for ways to develop their knowledge of cryptocurrencies in order to make sure that they have some income in the future. There are even the stories of the employees who are leaving their jobs in order to start trading because they can make more money than having a regular nine to five job. They did not see it coming, but the crisis in Venezuela is demanding some survival ways in order to have some strategy of life.
Venezuelans already have their own cryptocurrency which is Petro, It was launched by President Maduro in October 2018. Sadly, Petro failed. It was another mistake of the government. At the same time, more and more Venezuelans are struggling to find a way to have a meal in order to survive.
Cryptos are helpful but they not enough
It goes without saying that cryptocurrencies have helped Venezuelans with access to computers and gave them the ability to earn some money but the system is still far from comprehensive. Poor people have not even had internet access to have online accounts and do some trading. So while crypto is really effective, it is not a magic bullet. A successful economy needs confidence and trust. Who can trust the Venezuelan government after years of crisis? No one. In the mainstream, the biggest problem of Venezuela is its credibility. People around the world had many problems and crises but they saved themselves with hard work and pursuit, most of the time the saver was the technology. In Venezuela, the hope is cryptocurrencies but it is not a solution.