Venezuela continues to face serious economic problems and the citizens of the country increasingly turn to bitcoin out of necessity or despair. Thus, the famous bitcoin peer-to-peer exchange platform, LocalBitcoins, has reached record trading volumes in the country, while the national currency’s hyperinflation rate has reached an astronomical 10,000,000%.
An economy in sharp decline
The country’s central bank has made some temporary changes to the monetary system which they hope will bring inflation below a million percent, but most Venezuelan citizens have completely lost confidence in the national currency.
Research suggests that the Venezuelan economy has been in sharp decline since 2013. Experts estimate that the economy has plummeted by at least 65% in recent years. According to some data, the inflation rate of the local currency is now 3.5% per day.
Since the national currency has become essentially useless for Venezuelan citizens, the adoption of cryptocurrencies has slowly begun to gain ground, especially in recent years.
The success of LocalBitcoins in Venezuela
Cryptocurrencies have become so popular in the country to the extent that the government attempted to issue its own cryptocurrency by creating a clone of Dash, which in the meantime has become very popular for purchases at major retail outlets in the country.
According to the CoinDance website, which keeps track of a variety of statistics related to the world of cryptocurrencies, LocalBitcoins has seen a massive increase in volume in Venezuela over the past month.
All this coincided with the drastic hyperinflation of the national currency, reaching historic highs.
In Venezuela, it is not easy to own foreign currencies like US dollars and it is also difficult to own and operate foreign bank accounts, due to the very stringent currency controls imposed by the government.
Whereas, thanks to LocalBitcoins, it is easy to convert bolivars to bitcoin and vice versa and this is why the platform is registering increasingly higher volumes.