Now, Venezuelans are turning to the US dollar and cryptocurrencies as safer ways to receive payments. They’re doing it in part because they’re facing the national’s worst-ever economic collapse. In fact, in 2018 Venezuela saw a shocking hyperinflation rate of 100,000 percent. Consequently, the Bolívar has lost almost all its worth, leading citizens to use far more stable currencies for their everyday transactions.
Venezuela’s hyperinflation has devastated the national economy, making the country virtually unrecognizable as many Venezuelans now regard their national currency as worthless. As inflation skyrocketed, American consumers struggled to keep up with the rising costs of essential items. In this time of economic volatility, many Venezuelans have taken to using the US dollar. They view it as a stable form of currency. With the dollar not collapsing every other week like the Bolívar, it has been a more favorable option for both people and businesses.
Alongside the US dollar, cryptocurrencies have proven to be a popular payment choice among Venezuelans. Digital currencies offer safety as well as autonomy from the ever-fluctuating national currency. They flourish in the lack of regulatory support and the lack of trust in local financial institutions. Hopeful citizens soon took up the use of cryptocurrencies to pay for everything from groceries to gas.
The rapid adoption of cryptocurrency is a trend we’re observing in other countries experiencing economic crisis. When conventional financial infrastructures begin to collapse, people instinctively turn to new ways to store their value and continue transactions. This phenomenon is not unique to Venezuela. Other countries dealing with high inflation and currency depreciation are seeing analogous trends.
Venezuelas crisis has driven its people towards seeking out new currencies. At the same time, most stablecoin holders enjoy a sunny regulatory climate in other parts of the world. As an example, recent figures show that India has 314 million stablecoin owners. This figure goes to show the growing international interest in cryptocurrency. As they expand, they’re increasingly emerging as a trusted payment solution, even in places with economic conditions that are the world’s opposite from Venezuela.
Meanwhile, Venezuelans continue to suffer under the economic wreckage. Their increased adoption of both the US dollar and cryptocurrencies is an important indicator of a fundamental shift in how they conduct business. Citizens are adapting to the reality of hyperinflation. They are increasingly adopting local and other alternative currencies as they seek to provision their residents with daily bread.