Venezuela Ranks Third Among Countries with highest Crypto Adoption
According to a report issued by the United Nations Conference on Trade and Development, Venezuela ranks third among the countries with the most digital currency adoption, only behind Russia and Ukraine. The report, which also deals with the causes of this growth and crypto regulation, found that 10.3% of citizens in Venezuela held Cryptocurrencies at the time report was published.
Ukraine is ranked first on the list, with 12.7% of its population holding some kind of Cryptocurrency, while Russia is second on the list, with 11.9% of the total citizens holding cryptocurrency. This can be explained by the domestic economic situations these countries are facing and the swings their fiat currencies are experiencing due to conflict.
Also Read: Can You Insure Cryptocurrency? Here's All You Need To Know
The report also shows that developing nations have been more receptive to the proposition of Digital Assets. Of the first 20 countries with the most adoption, 15 are qualified as developing nations under United Nations standards.
The study also tries to explain the reasons that have made cryptocurrency adoption grow rapidly in these developing nations. The report notes that the Covid-19 pandemic played an important part in the adoption of Cryptocurrency. It states: “The use of cryptocurrencies was an attractive channel, in terms of price and speed, through which to send remittances. During the pandemic, the already high costs of traditional remittance services rose even higher during lockdown periods due to related disruptions.”
The second reason that propelled this development has to do with the view that masses of these nations have about cryptocurrency as a useful tool to hedge their savings against inflation and fiat currency volatility. This is why nations like Argentina and Venezuela, which have faced tough inflationary periods, are highly ranked in Cryptocurrency adoption reports.
This rapid development has also fueled a regulatory response from governments in these countries. Venezuela already has a fairly non-ambiguous cryptocurrency regulatory framework, that establishes Bitcoin (BTC) and Cryptocurrency mining as legal activities. Russia and Ukraine are in the process of also establishing clear framework for the use of cryptocurrency.
With electricity available at a price as low as 0.06 cents per kWh, cryptocurrency mining has been extremely lucrative in Venezuela, a nation riddled by economic uncertainty and a high unemployment rate. With Inflation also running at nearly 3,000 percent. So, a lot of people are willing to bet everything on Blockchain and Cryptocurrency despite fears of volatility usually associated with these digital currencies. While the greed of quick wealth creation is forcing Venezuelans to get involved with crypto mining, not everyone can become a miner in the South American nation, where the minimum wage is around $10. Many people lack the resources to arrange the necessary equipment to mine cryptocurrencies.
Also Read: FTX Exchange Reportedly Acquiring Robinhood
There are some other roadblocks as well – like frequent power outages and extremely slow internet speeds. However, these problems are not powerful enough to deter the Venezuelans or disrupt a rapidly growing Cryptocurrency Mining Industry.
Hyperinflation has also dogged Venezuela's currency, the bolivar, for several years now and it has continued to slide against the USD. Many experts see cryptocurrencies as a way out of hyperinflation for the citizens.
Venezuelan President Nicolas Maduro had previously launched a digital currency called the 'Petro' in 2017. He said ‘Petro’ would pave the way of getting around what his government called the American "financial blockade" of the South American nation.
Despite the president and his government pushing to make the Digital Currency popular, Petro failed to win consumer or investor confidence. Bitcoin, on the other hand, has caught the imagination of the Venezuelans masses.
Leave a Comment