TL; DR
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According to Javier BastardoBitfinex’s Bitcoin Ambassador in Latin America, the reason why crypto adoption in Venezuela is low is simple: Venezuelans don’t want cryptocurrencies, they want US dollars.
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While magical internet money can be used to make purchases some things online, the ability to use crypto to buy everyday things is still not really established (especially in countries like Venezuela). Until that happens, USD will likely be favored over crypto.
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While in theory BTC could be a wonderful solution to Venezuela’s inflation and authoritarian woes excercise it will take a lot more time and training.
Full story
Just like Slack started as a gaming company and Facebook started as a college rating platform, until a product is in the hands of users, we will never Real know the best usage scenarios.
(Keep that in mind as you read this).
Chainalysis just released its version final report on crypto adoption in Latin America.
And the findings are surprising – especially for Venezuela.
The Venezuelan in recent years bolivar has faced hyperinflation and a government that prefers to run an authoritarian regime.
You know what’s great when it comes to fighting hyperinflation and authoritarianism?
Bitcoin.
(It’s a scarce asset, only 21 million BTC ever created, and it’s decentralized).
So why is Venezuela showing such low adoption rates of BTC and other cryptocurrencies?
According to Javier Bastardothe Bitcoin ambassador of Bitfinex in Latin America, the reason is simple: Venezuelans don’t want cryptocurrencies, they want US dollars.
While crypto is increasingly used as an on- and off-ramp to the USD, in Venezuela it is generally only used as such, rather than as a store of value or tradable asset.
For example, Chainalysis’ report shows that 92.5% of Venezuelans use a centralized exchange (CEX) instead of a decentralized exchange (DEX).
What does this all mean?
First, while magical internet money can be used to make purchases some things online, the ability to use crypto to buy everyday things is still not really established (especially in countries like Venezuela).
Until that happens, USD will likely be favored over crypto.
Second, there seem to be deep-seated trust issues when it comes to a country like Venezuela. While a DEX works (relatively) well in countries like the US, CEXs are considered much more reliable in LATAM.
So while you’re inside theory BTC could be a wonderful solution to Venezuela’s inflation and authoritarian woes excercise it will take a lot more time and training.
Just as a startup makes assumptions about its users before it goes to market, it is ultimately the users who determine whether or not the product is adopted.
It seems that some assumptions about BTC being a perfect replacement for the Venezuelan bolívar are not entirely correct… at least, not yet.
