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- In 2019, Venezuela had the second-highest global volume on LocalBitcoins, showcasing widespread adoption of digital assets.
- María Corina Machado proposed using Bitcoin reserves to revitalize Venezuela’s economy, following El Salvador’s successful model.
In Venezuela, hyperinflation has driven many citizens to seek financial alternatives, with Bitcoin as a popular option. As the local currency, the bolívar, devalued rapidly, the purchasing power of wages and savings evaporated. Faced with this economic crisis, Venezuelans turned to Bitcoin, a decentralized digital currency that operates independently of any government or central bank.
When fiat currency is devalued due to hyperinflation, it’s an opportune moment to reconsider your financial system. Starting a new economic cycle with traditional, manipulated, or centralized money may not be ideal. Instead, exploring hard, scarce digital currencies could provide a more stable foundation.
Bitcoin’s decentralized nature made it an appealing option for those seeking a way to preserve their wealth. Unlike the bolívar, Bitcoin cannot be manipulated by the state, offering a stable financial solution. In 2019, Venezuela recorded the second-highest global trading volume on LocalBitcoins, demonstrating the widespread use of Bitcoin as a hedge against inflation.
The International Monetary Fund predicted an inflation rate of 5,500% for Venezuela by 2021, and the country has since struggled with economic instability. With the government continuing to print money without backing, Bitcoin provided a way for citizens to protect their assets from the rapid devaluation of the bolívar.
Bitcoin also became a tool for transferring money from abroad and paying for goods and services. For many Venezuelans, it offered an entry into a more stable crypto economy. This shift represented not only a means of safeguarding savings but also an opportunity to engage in the global economy.
Although Venezuela has seen increased dollarization in its economy, with the U.S. dollar accounting for 32.7% of transactions, Bitcoin remains a viable option for those seeking financial alternatives.
Recently, opposition leader María Corina Machado proposed using Bitcoin reserves to help rebuild the Venezuelan economy. Her proposal mirrors a similar approach taken by El Salvador, which has integrated Bitcoin into its national financial system.
BREAKING: 🇻🇪 Leader of Venezuelan Opposition María Corina Machado proposes using #Bitcoin as a national reserve asset.
Bitcoin is a "lifeline" and "vital means of resistance" 🙌 pic.twitter.com/5R1q7zVHyy
— Bitcoin Magazine (@BitcoinMagazine) September 5, 2024
In the interview, Gladstein pointed out that Venezuelans are turning to Bitcoin to tackle hyperinflation, protect their savings, and fund their emigration. Machado concurred, calling Bitcoin a crucial aid for avoiding state-controlled exchange rates. She proposed integrating Bitcoin into Venezuela’s national reserves to help recover wealth and rebuild after the dictatorship.
“Bitcoin bypasses government-imposed exchange rates and helps many of our people… It has evolved from a humanitarian tool to a vital means of resistance,” Machado stated.
Machado highlighted that Bitcoin facilitates the evasion of government exchange controls and has evolved from a humanitarian instrument to a critical tool for resistance.
We envision Bitcoin as part of our national reserves, helping rebuild what the dictatorship stole.”
Furthermore, Machado underscored the determination of the Venezuelan populace to reinstate democracy, referencing their longstanding opposition to the regime. She acknowledged the significance of technologies like Bitcoin in fostering financial autonomy and aiding in the restoration of a democratic Venezuela.
As we reported in CNF, as Bitcoin’s value grows, it could offer Venezuela a long-term solution, potentially attracting foreign investment and positioning the country as a hub for crypto digital currency innovation in Latin America.
