Reuben is the Chief Operations Officer of Zcoin.
Amidst hyperinflation, a leadership crisis, and international interference, Venezuela’s crisis has come to represent the failings of modern finance and highlights how cryptocurrency could reshape it.
Venezuela’s economy has been in a downward spiral for years, with extremely tight capital controls dating back to the early noughties limiting citizens from acquiring foreign currency.
The political situation has come to a head, with the leader of the opposition, Juan Guaidó, declaring himself the legitimate leader, whilst the incumbent Nicolás Maduro refuses to back down.
In amongst this instability, ordinary Venezuelans are suffering. Hyperinflation nearly hit 1.7 million percent in 2018, which has driven thousands of citizens to hike the 125 miles through the Andes, to Colombia.
With no indication that the situation is coming to a conclusion, I want to explore the lessons we can take away from this crisis; specifically in terms of the role cryptocurrency can play in an unstable political environment and the importance it can play in protecting citizen’s privacy.Crashing economies encourage Bitcoin adoption
With the local currency falling in value whilst inflation spirals out of control, Venezuelans have taken control of their financial security with cryptocurrency.
Free of centralized custodianship, cryptocurrency gives individuals a comparatively stable asset that they have full ownership of and can transact with, without the fear of government oversight. A fear that is not without basis: Maduro’s government freezes any bank account that makes a transaction worth more than $50.
In Venezuela, citizens have been adopting Bitcoin to hold their assets in a more stable form. Despite the high cost of trading through peer-to-peer (P2P) exchange Local Bitcoins, Venezuela trades more Bitcoin than larger countries like Austral...