A prolonged hyperinflation of the Venezuelan bolivar has made it just about unusable. Over the last couple of months, bitcoin has taken control over the country as the primary currency and the citizens have been using the digital currency to buy basic goods, medicine, and other key items.
Patricia Laya, Venezuelan Bureau Chief at Bloomberg, has revealed that the daily limit of country’s ATMs is set at 5,000 bolivars, worth around $0.05. Laya expressed that she had held up 20 minutes in line to get $0.05 in hyperinflated currency worth just about no value.
Because of the deficiency of money and the quick decrease in the valuation of the Venezuelan bolivar, the residents have started to investigate different strategies for payments since the start of 2017. Since the estimation of money has dove and the residents, organizations, and experts have effectively dismissed the cash, the majority of the Venezuelan population has started to opt for alternative forms of money.
Consistently, the fame of bitcoin inside Venezuela has surged, as a rapidly expanding number of individuals have begun to use the digital money as the primary cash, medium of trade, and store of value.
In a meeting with the Associated Press, Venezuelan inhabitant John Villar expressed that he has purchased two plane tickets to Colombia, his better half’s medicine, and paid his workers with bitcoin in the previous month. Villar stated that he plans to keep using bitcoin like the majority of Venezuelans.
“This doesn’t involve politics. This involves survival,” said Villar.
Currently, it is nearly impossible to buy any goods or services with Venezuelan bolivar, given its low value and adoption in the country.
In coming days, Venezuela may become the first country where bitcoin takes over the national currency and becomes country’s main financial system.
But Why Bitcoin, And Not Some Other Currency?
In Venezuela, the majority of the people have lost trust in the government, national bank, and banks. Its currency is almost broken and its esteem has dived to a point where no goods or services can be acquired with it.
Bitcoin is a decentralized and peer to peer currency framework, store of significant value, and a safe haven asset that shows a trustless ecosystem. Anybody inside the system can send and get payments from each other on a shared premise, without the involvement of intermediaries.
In future, bitcoin will probably rise as the real substitute to the declining fiat monetary standards. In the long term, bitcoin could even replace multi-trillion dollar fiat currencies like the US dollar, Japanese yen, and Chinese yuan, if it continues its current development rate and exponential increment in value.