Venezuela’s economic collapse has prompted millions of citizens to seek out additional financial tools, like the United States dollar and cryptocurrencies. As the government’s ongoing battle with hyperinflation continues to render traditional currency nearly worthless, citizens have turned to alternative forms of currency in search for stability.
Venezuelan economy hyperventilated in 2018 with a hyperinflation rate of 100,000 percent, the highest in history. This apocalyptic economic disaster made the Bolívar, the country’s currency, basically worthless as hyperinflation made its prices rise uncontrollably. This led to Venezuelans increasingly relying on the US dollar as a stable currency and medium of exchange. The dollar’s stability has acted as a lifeboat for many, in a country faced with the world’s most acute economic collapse.
At the same time, the meteoric rise of cryptocurrencies has caught the eyes of Venezuelans. No industry has been more infectious than financial institutions in this nation. Digital currencies offer an option that isn’t subject to this much government control. This shift reflects a broader trend, not only in Venezuela but worldwide, where individuals seek refuge from inflation and currency devaluation.
India is poised to potentially shoot the first very positive global impact on the cryptocurrency landscape. At 314 million stablecoin holders, it has the most in the world by far! The increasing circulation of digital currencies constitutes an undeniable international trend. American consumers of all ages are clamoring for convenient, sure, and smart ways to pay and get paid. Since then, stablecoins have found tremendous success in many markets, including India. They are unique in that they are designed to have stable value, usually by being pegged to traditional currencies or assets.
The contrast between Venezuela’s economic collapse and India’s exploding stablecoin industry paints a remarkable picture of the changing face of finance. Venezuelans are navigating an extreme crisis using foreign currencies and cryptocurrencies. On the flip side, India shows us how cryptocurrencies can flourish in a safer space.
Additionally, the surging demand for cryptocurrencies is an outgrowth of people’s pursuit of financial autonomy and security wherever they live around the globe. In Venezuela, people use US dollars and cryptocurrencies not because they prefer to, but because they are forced to. This reliance is a result of their dire straits. Indian citizens are enthusiastically adopting digital currencies. They view them as an essential anchor within an increasingly digital financial ecosystem that creates new pathways for capital and innovation to flow.