Despite the prevailing socioeconomic and political crisis that has plagued Venezuela for years, multiple merchants using digital currency have been increasingly pivoting to the Latin American country, as more people now begin considering other alternatives to bolívar, the country’s traditional currency.
As the country’s hyperinflation hits over 80,000% per annum in 2018 marked by soaring prices, climbing hunger, disease, crime and death rates, the Venezuelan government has been increasingly looking to cryptocurrency to manage the country’s runaway hyperinflation.
According to a recent Inverse report, as of August 2018, over 800 merchants operating in Venezuela now accept Dash, one of the top 20 digital currencies in terms of market cap. While the country’s sovereign crypto Petro experiences rising volatility, Dash, as well as other leading cryptocurrencies in the market, have so far proven useful, as more Venezuelans find its usability far outweighing its volatility.
As Edge wallet app founder and CEO Paul Puey stated in the report:
“They’ve already flipped the switch. They’ve already hit that bar that we haven’t hit.”
Florida International University adjunct professor Brian Fonseca also shared this stance, adding that:
“Venezuelans are now turning to cryptocurrencies as a way around inflation and unstable currency.”
As Dash continues to gain massive traction in the country, more merchants in the region have been increasingly accepting Dash as well as other digital currencies as a mode of payment since December 2018, among which includes Church’s Chicken, the country’s 4th largest fast-food chain. As it stands, the food chain now operates across 23 regions in Venezuela as well as the capital city of Caracas.
Another merchant in Venezuela has also previously adopted Dash as a tender. As Steelus co-founder Kevin Ramirez claimed, using Dash after the collapse of bolívar enabled the company to salvage over 99 percent of its revenue.
As more merchants pivot to using digital currencies in an attempt to survive Venezuela’s massive socioeconomic collapse, the country’s president Nicolás Maduro has also previously introduced a native cryptocurrency backed by oil, gold, gas, and diamonds. However, that botched project has only so far largely garnered criticisms both from the crypto industry as well as governments across the globe.
As Fonseca argued:
“Venezuela’s ability to back virtual currencies with oil and mineral wealth has made it uniquely positioned. I suspect it will struggle with the technical capability — it can’t seem to keep the lights on at the moment, let alone power virtual currency transitions at a high volume. But I don’t have enough ground truth on that.”