Venezuelans Switching to Use of Bitcoins for Payments, Necessity Purchases

Venezuela (Sputnik) – The use of bitcoins instead of Venezuelan national currency, the bolivar, for work and trade purposes is growing due to economic problems and the soaring inflation rate, media reported on Friday.

The number of users has increased from 450 in August 2014 to more than 85,000 in November this year, according to the brokerage website Surbitcoin.com.

“Bitcoin is mainstream neither in Venezuela nor in the world but there is a growing interest in the technology… With Cryptobuyer, we convert bitcoins into bolivars and help Venezuelans pay for daily life necessities, such as mobile phones recharges, television, water and electricity bills as well as banks transfers in bolivars,” Jorge Farias, the CEO of cryptobuyer.io exchange platform, said, as cited by the Guardian.

Pixabay.com

Pixabay.com

The peer-to-peer currency does not require a third party for transactions, as it is free from government and bank controls. Venezuelans only need online access to store bitcoins which they can exchange at the black-market dollar exchange rate, which is almost five times the official exchange rate.

The currency is reportedly used to purchase food and medicine, as well as sending funds from abroad and using it as savings.

On Sunday, Venezuela’s President Nicolas Maduro ordered the government to pull from the circulation the country’s highest-denomination banknote of 100-bolivar within 72 hours as a measure against Venezuela’s currency smuggling. The move caused Venezuelans to rush to unload their the largest denomination bills.

Venezuela has strict foreign exchange controls, and an estimated inflation rate of close to 500 percent. According to the official exchange rate, one bitcoin is currently worth around 7,770 bolivar ($780).

 

This report prepared by Sputnik.