In the middle of increasing economic woes and crypto adoption across Venezuela, President Maduro’s government has demanded payment for passports in the government-backed cryptocurrency, which is now known as the Petro. This is likely to put an additional burden on Venezuelans who are already turning to crypto assets as a means of survival in Venezuela’s dismal economic climate.
Mass Exodus From Venezuela
A United Nation report indicates that 2.6 million Venezuelans have already left the country, while approximately 5,000 Venezuelans continue to cross the border into neighboring countries daily to escape economic instability. Hyperinflation is so bad that the local currency, the Venezuelan Bolivar, has lost 99% of its value since the beginning of 2018 and its value continues to halve every 26 days.
The government’s new requirement to pay for passports in the Petro is likely to put an additional obstacle in the path of refugees. Petro-related activity outside of an ICO-like presale of the cryptocurrency has been elusive and ordinary citizens have reportedly not seen any tangible benefits from the Petro. Considering that major Venezuelan crypto exchanges have not listed the Petro, it’s unlikely that citizens will have the ability to obtain enough Petro to obtain a passport anytime soon.
Venezuelans Are Capable of Adopting Cryptocurrencies Outside of Petro
Use of crypto assets has seen a significant increase in Venezuela because volatility in crypto markets are seen as tame compared to the rapid devaluation of the bolivar. DASH has seen an upswing in merchant adoption in Venezuela, for instance, because local restaurants prefer accepting the crypto asset in comparison to accepting wheelbarrows full of cash. Merchants value cryptos even further when they take into account that the cash they receive devalues even further by the time they have a chance to spend it on business expenses.
Venezuelans have had some luck using Yours.org and Bitcoin Cash (BCH) to raise money to pay for medical treatments and their pets’ veterinary bills. Venezuelans have also risked arrest by turning to crypto mining, while also picking up video games as a way to gain Bitcoin in a variation of “gold farming”.
Venezuelans who can hold on to their cryptocurrency holdings for a while may be seen as relatively well-off compared to their neighbors and peers. However, for many people who turn to crypto in countries that are undergoing inflation hyperinflation, it’s a matter of practicality or even survival.
These Venezuelans may not be very enthusiastic about using the Petro as anything other than a way to obtain a passport and leave the country. This assumes that ordinary Venezuelans will even have a way to obtain the highly elusive Petro at any time in the near future.