Venezuelan citizens exchanging fiat to Bitcoin surpasses $1 million per day

The economic situation for the Venezuelan people is spiraling out of control.

The Venezuelan Bolivar is declining so severely, that citizens are now turning to cryptocurrencies in record numbers.

The Venezuela bolivar-to-bitcoin market hit the equivalent of $1.009 million in fiat exchanged for bitcoin on April 17.

This number was an all-time high according to data from VeneBloc.

VeneBloc tracks transactions in the South American nation made on peer-to-peer exchange LocalBitcoins.

In 2003, the Venezuelan Government introduced strict foreign exchange controls.

In recent years, these restrictions are forcing citizens of Venezuela to turn to cryptocurrency.

Citizens of Venezuela Turn to Bitcoin in Record Numbers

These controls see the people of Venezuela, who can’t obtain government approval to purchase dollars at legal rates, turning to the black market.

For Venezuelans, cryptocurrencies like Bitcoin are the key to accessing foreign goods and surviving government failures.

The co-founder of Venezuelan-based cryptocurrency exchange Cryptobuyer, Jorge Farias, said last year:

“The transaction takes a few minutes, our commission is three to seven percent lower than the banks, and our exchange rate is regulated by supply and demand, making it more realistic than the official currency”

Accessing foreign exchange markets in Venezuela is difficult, making it hard for citizens to know what their currency is worth.

Accessing foreign exchange markets in Venezuela is difficult, making it hard for citizens to know what their currency is worth.

Cryptocurrency exchanges give Venezuelans a sense of their currency’s value.

In the first quarter of this year, prices in Venezuela rose by 454 percent, with a staggering 8,900 percent increase in the last 12 months.

Venezuelan el Petro

This hyperinflation is putting the country on the brink of economic collapse.

It’s a problem that the government of Venezuela is seemingly ignoring.

Instead, the Venezuelan government is prioritizing its oil-backed cryptocurrency el Petro (PTR).

El Petro was successful in raising over $5 billion from global investors during its initial token sale.

Daniel Peña, the executive secretary of Venezuela’s Blockchain Observatory says it may take some time to positively impact the country’s economy.

In an interview with Cuatro F newspaper, Peña says it may take “three to six months” to have an effect, saying:

“There are many advantages, among them is that the inflationary scheme of the Venezuelan economy breaks down.

“because it is a digital currency that is safe to handle and has more functionality.

“The intermediaries will disappear, it will be a directional purchase.

“The waiting time for transactions will be reduced, because it will be faster than the banking system.”