On August 25, the Venezuelan government created a new cryptocurrency that is backed by oil. They issued this currency in an effort to escape from hyperinflation and create stability for their economy
The “venezuela replaces national currency with bitcoin” is a recent development in Venezuela. The country has replaced its national currency, the bolivar, with bitcoin for all transactions. This is due to the hyperinflation of the bolivar and the lack of trust in Venezuelan banks.
In Venezuela, it is now simpler to get bolivars using bitcoin rather than dollars.
Facts to remember:
Venezuela has historically had little liquidity in the first quarter of the year.
Other monetary policy initiatives by the central bank exacerbate the lack of bolivars.
Every day, it becomes increasingly difficult for ordinary Venezuelans to get bolivars, encouraging the use of digital payment systems and a larger reliance on US dollars in business. The economist Aaron Olmos talked with LogitechGamingSoftware on the reasons for the limited circulation of bolivars in the Venezuelan economy.
Olmos claims that demand for bolivars in Venezuela has traditionally increased in the first quarter, owing to the March 31 income tax payment deadline (ISLR). Companies and individuals must pay the tax in bolivars by that date to avoid fines, which increases demand for the local currency, which is heightened in March, according to Olmos.
According to Olmos, one of the reasons of the shortfall is the large legal reserve placed on the banking sector. Is the amount of money that banks and other credit institutions are required to hold in reserve with the central bank. According to the expert, this immobilized money, which presently accounts for 83 percent of all money placed in banks, is another element that leads to less money in circulation.
On the other hand, after the third monetary reconversion, on October 1, 2021, the use of electronic means of payment has increased notably, Olmos maintains. An instant interbank transfer system was added to the electronic system called Mobile Payment, carried out through cell phones, which works during non-working hours and on weekends. «The availability of these automated means of payment also contributes to a smaller amount of cash in the economy>>.
According to the latest statistics from the Central Bank of Venezuela (BCV), between January and September 2021, the growth of mobile payments climbed by 30%. During that nine-month period, 1,044 million transactions were completed, compared to 801 million during the same time the previous year. With an average of 116.04 million monthly transactions, mobile payment is second only to points of sale, which execute an average of 267 million transactions every month.
According to BCV estimates, the overall monetary liquidity (M2) for January this year was 4,336 million bolvares, which comprises coins and banknotes, sight and term deposits, as well as participation certificates. Coins and banknotes accounted for VED 213 million, or 4.81 percent of overall liquidity.
For all of these reasons, obtaining Bolivars in Venezuela in exchange for dollars and other foreign currencies has grown increasingly difficult for Venezuelans both within and outside the nation. Because some persons who work in the buying and selling market get digital dollars from overseas and make transfers in bolivars, this sort of transaction is widespread. They employ platforms like Zelle, Venmo, and PayPal, among others, to do this.
All of this causes concern among the public who rely on remittances and payments from overseas. Despite these challenges, they illustrate the ease and speed with which cryptocurrencies may be used to make remittances. The transmission of cash takes just a few minutes, with no third-party interference, and the receiver obtaining the equivalent in bolvares via peer-to-peer exchange networks.
Using bitcoin to get money
Several peer-to-peer (P2P) cryptocurrency trading platforms are now operational in Venezuela, where bolivars may be obtained by selling bitcoin (BTC). LocalBitcoins and Binance are the most popular peer-to-peer exchange platforms in the nation.
In contrast to how complicated the dollar exchange market is, BTC sales on these sites enable you to get bolivars in a matter of minutes. Those interested in selling bitcoin should first look into the possible sales ranges in bolivars. Then, depending on the suggested purchase prices as well as the bank to which the payment will be made, identify a probable buyer.
For the exchange of bolivars and bitcoin, peer-to-peer networks are the most efficient method. Adobe Stock (stock.adobe.com).
There are measures on both platforms to guarantee that the transaction goes off without a hitch for the parties. For example, as a guarantee for the buyer, the trading platform moves the BTC to be sold to a temporary fund and locks it for a certain amount of time. Similarly, after the buyer has received payment, the platform releases the BTC from the temporary fund, which is then transferred to the buyer’s wallet.
This procedure takes no more than five minutes and has been disclosed as a rapid and secure approach to get bolvares. Those who engage in the sale of bitcoin have access to information about their counterpart’s previous transactions, which increases the transaction’s security. In the case of a dispute between the parties, the platform acts as a mediator.
Venezuela is in a state of extreme economic crisis, with hyperinflation and many people are looking for ways to get out of the country. Bitcoin has been gaining popularity as an easy way to do so. Reference: how to buy bitcoin in venezuela.
Frequently Asked Questions
Is Bitcoin allowed in Venezuela?
A: Yes, it was legal in Venezuela.
What Cryptocurrencies are being used in Venezuela?
A: The Venezuelan Bolivar is the main currency thats being used in Venezuela, and it has been devalued by 70% since February 2018. There are many cryptocurrencies that are now accepted by people living in Venezuela such as Bitcoin Cash, Monero and Zcash
What is the price of Bitcoin in Venezuela?
A: The price of Bitcoin right now in Venezuela is about 0.00004 BTC
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