Today, many Venezuelans turn to US dollars and cryptocurrencies for their daily transactions. They are recently seeking to implement these alternatives in large part due to the country’s dire economic crisis. By 2018, hyperinflation reached a staggering high of 100,000 percent. Consequently, the national currency, the Bolívar, has severely hyperinflated and is nearly worthless. So too has the financial landscape. Shockingly, in response, hundreds of thousands of citizens are now demanding more stable forms of currency than the bolívar for their everyday exchanges.
Venezuela’s hyperinflation crisis has all but obliterated the Bolívar’s value. Accordingly, people are working as fast as they can to identify good replacements. In response, millions of Venezuelans have turned to the US dollar as a widely accepted means of transacting. In addition to conventional foreign currency, cryptocurrencies have become another preferred option. Cryptocurrencies allow for an alternative to centralized forms of money and centralized control itself. This sounds great to people hungry for freedom, particularly in an era of economic uncertainty.
In the case of India, the trend of stablecoin adoption has seen phenomenal growth. Recent estimates indicate that nearly 314 million of the nation’s 335 million people own stablecoins. This by extension turns it into the country with the most stablecoin owners in the world! In exchange, stablecoins provide users a more stable value alternative to other, more volatile cryptocoins. They do that by backing their value with fiat currencies or commodities.
The growing use of stablecoins in India reflects a broader trend among investors and consumers looking for stability in their financial transactions. Venezuelans suffering from hyperinflation continue to fight against the rapid inflation. At the same time, frequent market fluctuations have prompted many Indians to adopt stablecoins and shield themselves from volatility. This change is part of a larger, global movement towards decentralized finance (DeFI) alternatives. These solutions are working to bring everyone into the realm of financial services.
While some countries backtrack, others like Venezuela and India are doubling down on crypto and stablecoins. This is further evidence of the growing acceptance of digital currencies as legitimate forms of payment. We don’t have to tell you that traditional financial systems are currently plagued by ongoing inflation and market volatility. Consequently, people are turning en masse to new monetary alternatives to preserve their wealth and facilitate trade.