Venezuela has been engulfed in a terrible economic crisis for a long time. From 1999 to 2013 Hugo Chavez ruled the country, and then Nicolas Maduro replaced him. He sought to solidify his position by gaining control of many pivotal institutions.
Under Maduro, the economic situation in the country has been devastating so far. Shortage in basic supplies is prevalent in the country, and Venezuela was hit by hyperinflation. A lot of people have already fled the country for a better situation.
The crisis was further triggered when Juan Guaido declared himself as an interim president in January 2019. Plenty of countries, including the United States supported Guaido, but Maduro has strong backing from Russia, let alone the military is also loyal to him. The situation is still very difficult, and the only victims in this tough moment are people.
Economic sanctions from the United States had its toll. People are in poverty, but a unique discovery has been cryptocurrency, in particular, Bitcoin, which helped the country a lot. This article will discuss the importance of BTC in a failed economy.
Cryptocurrency as salvation during the crisis
According to this Bitcoin Billionaire review and the number of Venezuelan customers in the height of crypto popularity, once the Venezuelan Bolivar became practically valueless after hyperinflation, a lot of people sought refuge in cryptocurrencies as an alternative to the country’s national currency. Bitcoin offered citizens total control of the money because we know that it is a decentralized system that does not have government control or third party involvement in transactions.
The country at some launched its cryptocurrency called the Petro which is supposedly backed by oil.
Many Venezuelans are currently using Bitcoin as a method of payment. Even freelancers receive a salary in Bitcoin and exchange them to dollars because as has already been mentioned above, the bolivar is no more a thing of value to purchase items.
With the ATM, which the government installed life has become a bit easier for Venezuelans. The government has also started earning some commissions from transactions. The interest has never been high in cryptocurrencies than it is now in Venezuela and seems unlikely to change in the near future.
Crypto helps avoid sanctions
Bitcoin has been particularly useful in avoiding sanctions from the United States. In July 2019, President Nicolas Maduro launched the Jetman Pay system. Fees are converted to cryptocurrency and withdrawn from the country.
The Venezuelan government bypasses US sanctions with the help of the Bitcoin cryptocurrency, The system of collecting aviation taxes through the Jetman Pay application, which converts them into digital money and withdraws from the country, has been launched at the Maiketia International Airport.
Venezuela has been assisted from its partners, as China, Russia, and Hungary are participating in this process. In these countries, government-controlled accounts store aviation taxes transferred from Bitcoin to dollars.
In the future, Maduro is preparing to expand the operation of this system to other airports in the country. In the same way, the government plans to withdraw funds from fees for refueling transit aircraft.
Maduro also ordered the opening of terminals of the country’s largest bank, which would work with the national cryptocurrency Petro. It clearly shows that even the president of the country is involved in the process to avoid sanctions from the North American country successfully and somehow stabilize the situation.
Crypto has never been so popular in Venezuela than it is now. Bitcoin revived the country to some extent and the number of people is using it as a way of payment. It is hard to predict how long the problematic situation will last in Venezuela, but for now, it seems that the country is somehow coping.