venezuela - Pwim.Net

China's Crypto Adoption is Ahead of the US, According to Chainalysis’ On-Chain Metrics

Chainalysis recently published a report on the global adoption of cryptocurrencies and found that China is ahead of the US on the list.

Cryptocurrency data analytics firm Chainalysis recently published its Global Crypto Adoption Index 2020, which looks at four on-chain metrics. These on-chain metrics include the total value of on-chain crypto transactions weighted by purchasing power per capita (PPP), the value of on-chain retail transfers weighted by PPP, the number of on-chain crypto deposits by the number of internet users, and peer-to-peer (P2P) exchange trade volume, weighted by PPP per capita and the number of internet users.

Chainalysis also estimates each country’s cryptocurrency transaction value by measuring the cryptocurrency activity on each platform and distributing it by country based on the web traffic from each country to the website. Website language options and headquarters location further helped the firm to refine their analysis.

154 countries were analyzed, according to the report, and only 12 of them had very little cryptocurrency activity, that amounted to a score of zero. This indicates that cryptocurrency has truly gone global and that most countries are turning to crypto as a means of value storage and medium of exchange.

According to Chainalysis’ Global Crypto Adoption Index ranking, Ukraine, Russia, and Venezuela took the top three spots, ahead of China and the United States of America. China ranked fourth, ahead of the US, which ranked sixth. China ranked poorly for its number of on-chain deposits and P2P exchange trade volume.

Source: Chainalysis

Due to recent economic factors, Kenya and Venezuela both ranked very high for P2P exchange volume. Venezuela has been witnessing one of the worst economic crises ever seen, with its currency, the Bolivar going through hyperinflation and becoming almost worthless last year.

Digging into the data from financial intelligence service Sayari, Chainalysis pointed out that Criptolago, a Venezuelan state-owned cryptocurrency exchange is not actually helping struggling Venezuelans. An average Venezuelan earns 72 cents a day. Chainalysis highlighted that more than 75 percent of transfer volume is moved in transactions of over $1,000 of cryptocurrency in Criptolago.

Most of the cryptocurrency activity is driven by peer-to-peer (P2P) exchange activity, with the most being on LocalBitcoins. Venezuela is also the third-most active country on LocalBitcoins, and the second-most active when taken into consideration of the number of internet users and purchasing power parity per capita.

Paxful Exits Venezuela’s P2P Crypto Bitcoin Market Following US Sanctions

Paxful, the leading Bitcoin peer-to-peer marketplace, has officially withdrawn its crypto trading services from Venezuela after the Office of Foreign Assets Control (OFAC) of the US Department of Treasury classified the country as high-risk.

OFAC classifies Venezuela as a “high-risk country”

The news was announced by the Paxful team situated in Latin America. The Bitcoin marketplace team disclosed in a video released on their social media platform that cryptocurrency and financial regulations were becoming too strict for them to conduct business as usual in Venezuela. They added that it was with deep regret that they were exiting Venezuela’s crypto market.

Furthermore, with the OFAC classifying Venezuela under the high-risk category, Paxful needed to comply with the US financial regulatory sanctions. Being listed under the “OFAC sanctioned/high-risk countries” category entailed that traders in Venezuela were obligated to verify their identity before they sold or sent Bitcoin (BTC).

Bitcoin marketplace leaves Venezuela

Paxful pulling its crypto trading services from Venezuela is huge news, as the peer-to-peer (P2P) Bitcoin exchange was the second-largest P2P outlet in the country. Venezuelan crypto traders seemed to prefer decentralized exchanges like Paxful to government-regulated alternatives.

Paxful’s Latin American branch sent out an email on Monday to its Venezuelan crypto traders to announce the crypto service shutdown. In addition, the Bitcoin marketplace team tweeted:

“To our Paxful family in Venezuela,
Today we are saddened to announce that Paxful will cease operations in Venezuela. We hope that there will be another opportunity to enter the region again in the near future. This is not the end. Thank you always. – The Paxful Latin America (LATAM) team”

The withdrawal from the Venezuelan crypto scene is regarded as a deep loss for Paxful. The Bitcoin marketplace had courted the Latin American country for years, in hopes of delivering an interesting financial solution to the unbanked. The economic demographic of Venezuela and the high use of mobile phones in the region largely appealed to CEO and co-founder of Paxful, Ray Youssef. On his Bitcoin company’s official Twitter, the CEO had previously said:

“There is a massive opportunity that awaits in Venezuela to be the first closed loop crypto-economy.”

How Paxful can deliver financial relief during COVID-19

The peer-to-peer crypto marketplace has done a lot of good, despite coronavirus hitting global economies full force. With certain countries’ economies flushing faster than others, Paxful had conducted research in certain regions to propose better financial solutions. For example, Paxful research revealed strategies that were employed in Nigeria by Bitcoin traders to fight the devaluation of the country’s native currency, Naira.

In addition, earlier in May, CEO of Paxful Youssef had discussed with Blockchain.news about how “Bitcoin could serve as a better store of value for wealth” in times like the ongoing coronavirus pandemic. Others in the crypto industry have echoed that sentiment, as Bitcoin has increasingly been viewed as a safe-haven asset.

Deliberations about whether the cryptocurrency asset will potentially replace gold as the traditional safe-haven have risen, with more and more Bitcoin whales turning towards BTC as a hedge.

Lebanon Considers a Central Bank Digital Currency for 2021

The Governor of The Central Bank of Lebanon Riad Salameh has hinted that there was a possibility that the central bank, also dubbed Banque du Liban, may launch a digital currency by 2021.

According to a report by Bloomberg, the move to debut the national digital currency is geared to restore confidence in the country’s financial system, and gradually transition to cashless payments.

The current financial system of Lebanon has been described as a “nationally regulated Ponzi scheme” in which new monies are being borrowed to service old debts. For a country once viewed as “the Switzerland of the East”, one of its financial system anchors consists of its remittance industry, but it has been marred by the failing system.

With little details available with respect to Lebanon’s planned digital currency, Salameh also requested that banks operating in Lebanon should recapitalize by 20%.

Economically Troubled Nations Turn Towards Digital Currencies

It is becoming increasingly common for economically and financially troubled nations to take solace in digital currencies. While Lebanon is implying that it will introduce government-backed digital currencies, Venezuela, which has recorded a high inflation rate, has also seen its citizens turn towards Bitcoin as a hedge due to the weakening of the Venezuelan Bolivar.

While crypto activities are common in Venezuela, the government under the direction of President Nicholas Maduro has also created what seems like a Central Bank Digital Currency dubbed the Petro, a currency which the government wants the citizens to remit their taxes through.

While the economic woes of Venezuela have been ongoing for a while, Lebanon’s economic landscape took a new twist in 2019 according to reports. With Venezuela’s own financial system crumbling long ago, the nation has found ways to stay afloat, a move Lebanon appears to be taking baby steps towards at this time.

US Government Plans to Use USDC Stablecoin to Offer Foreign Aid in Venezuela

Venezuela’s opposition leader, who exiled in Spain, has partnered with US-based cryptocurrency companies AirTM and Circle to facilitate the distribution of funds to healthcare workers in the country on the northern coast of South America.

Circle CEO, Jeremy Allaire, stated that the partnership involved “a collaboration with the Bolivarian Republic of Venezuela, led by President-elect Juan Guaidó, US.-based fintech innovator AirTM, and coordination and licensing with the US government.”

Venezuela went into elections in which Juan Guaidó was declared the president-elect of the country in January 2019. He, however, has failed to dislodge President Nicolas Maduro, who was accused of rigging the election to hold on to power.

Since then, several countries, including the United States, gave Guaidó official recognition as Venezuela’s president. Trump administration has offered forms of assistance to the Guaidó-led government-in-exile. However, US government efforts have not been successful in removing President Nicolas Maduro from office.

President-elect Juan Guaidó has led the business partnership with Circle payment technology company and US cryptocurrency exchange AirTM to distribute relief funds to health workers and other locals in Venezuela. The US government has offered licensing and coordination.

The outbreak of the COVID-19 pandemic accelerated Venezuela’s difficulties. Hyperinflation in the country has had an adverse impact on medical workers, patients, and locals who, in several cases, have found their funds becoming worthless.

Circle’s USDC cryptocurrency has the potential to address such a situation as it is a stablecoin whose value is pegged to the US dollar and therefore does not suffer from price changes as the Venezuelan bolivar local currency. Furthermore, the USDC is a virtual currency, which makes it is easy to distribute the funds to people who are in urgent need.

The US Federal Reserve and Treasury Department would release funds to the Guaidó government, which would then utilize the funds to mint USDC. Then the USDC would be sent to AirTM crypto exchange where they would be distributed to the wallets of Venezuelan medical workers and locals who can withdraw the funds as bolivars at the free market rate.

AirTM has its own virtual debit card (mobile app); therefore, medical workers and locals would not need to interact with a Venezuelan bank. At the current moment, AirTM exchange has about 500,000 customers in Venezuela, and the number keeps rising.

Complicated Relationship Between Venezuela and the US

Since 2016, Venezuela has suffered from hyperinflation partly caused by the country’s controversial President Nicolas Maduro leaning on money printing. Forms of aids and assistance are needed to address the country’s ongoing economic crisis. But the relations between Venezuela and the US have been strained since Hugo Chavez became Venezuela’s president in 1999 and even got worse when the Trump administration recognized Juan Guaidó, opposition leader, as the country’s president instead of Chavez’s successor Nicolas Madura in January 2019.

The US has been dedicating efforts to send aids to alleviate the sufferings that Venezuelans experience. However, Maduro’s administration has been accused of being a stumbling block to allow humanitarian aids to enter the country. Early September this year, Maduro’s administration denied Venezuelans access to the US cryptocurrency exchange Coinbase and MercaDolar fiat remittance platform to distribute $18 million in aid. However, the current collaboration has made a landmark history in which USD stablecoin cryptocurrency is set to be used to offer foreign aids.

Venezuela to Launch its Central Bank Digital Currency in October

The Central Bank of Venezuela officially announced on August 6 Friday that it will launch its central bank digital currency (CBDC) in October this year.

To solve the high inflation of Venezuela’s currency, the Central Bank of Venezuela stated that the issued CBDC would remove six zeros readjustment and use the Short Message Service (SMS) exchange system to facilitate the public’s use.

Venezuela stated that the revaluation of its CBDC will not affect the value of the country’s legal currency, the Bolivar, and said that:

“The bolivar will not be worth any more or any less, in order to facilitate its use, it is being taken to a simpler monetary scale.”

Since 2016, Venezuela has suffered from hyperinflation partly caused by the controversial leadership of President Nicolas Maduro with his money printing policy.

It is reported that in 2020, the annual inflation rate is estimated to be approximately 2,300%. Forms of aids and assistance are needed to address the country’s ongoing economic crisis. Due to the devaluation of the Venezuelan bolivar, Venezuela, which has recorded a high inflation rate, has also seen its citizens turn to Bitcoin as a hedge.

Cryptocurrency activity has always been a widespread phenomenon in Venezuela. The government of Venezuela, led by Nicolas Maduro, issued its cryptocurrency Petro in Feb 2018.

According to the government, Petro is backed by oil and mineral reserves to support the depreciating Venezuelan bolivar currency and circumventing U.S. sanctions.

In addition to Venezuela’s statement to launch its central digital currency this year, South African country Lebanon also revealed that its central bank (also known as Banque du Liban) might launch a digital currency in 2021, according to the Governor of The Central Bank of Lebanon Riad Salameh.

Venezuela’s Main Airport to Accept Cryptos as Payment for Flight Tickets & Services

Venezuela’s main airport is reportedly preparing to begin accepting cryptocurrencies as payment for tickets and other services.

Simon Bolivar International Airport, Venezuela’s largest airport and famously known as Maiquetia, has recently announced that it is preparing to add Dash, Bitcoin, and Petro as a payment method for customers purchasing flight tickets and other services.

Freddy Borges, the Maiquetia Airport director, talked about the development and said that the airport plans to accept several cryptocurrencies, including Bitcoin, Dash, and Venezuela-based pegged digital currency, the Petro – a Venezuelan government-issued digital currency.

Borges said that the plan aims to make payments more universal and modern.

He further elaborated that the airport’s administration would establish a payment process in crypto assets within the requirements of the local regulator, Sunacrip – the Venezuelan cryptocurrency watchdog.

“We must advance in these new economic and technological systems to be accessible. We will activate a button for cryptocurrency payments in the airport platforms and commercial activities, in coordination with Sunacrip,”

The Simon Bolivar International Airport locates in downtown Caracas, the capital of Venezuela, receives typically more than two million passengers every year passing through the facility.

Borges mentioned that introducing cryptocurrency payment at the Simon Bolivar International Airport would fulfil the firm’s commitment to advance toward international standards and drive digital currency adoption. He further said that foreign tourists, including those from Russia, would benefit from the option of a cryptocurrency payment.

The Digital Bolivar Circulating

With a high inflation rate in Venezuela, almost nobody wants to pay with cash anymore. This phenomenon explains why cryptocurrencies are being used fundamentally in the country more than in nearly any other nation. Cryptocurrencies are believed to make everyday life much easier in Venezuela.

A rising number of Venezuelans are significantly investing their savings in cryptocurrencies, and everyday payments are increasingly being made with Bitcoin and other digital currencies.

Chainalysis blockchain analytics firm recently ranked Venezuela third in the world in terms of daily cryptocurrency use.

Venezuela’s central bank has been revamping its national currency, the bolivar, and experimenting with central bank digital currency (CBDC) – the digital Venezuelan bolivar.

On October 1, the central bank rolled out the circulation of its CBDC (the Petro, an oil-backed cryptocurrency launched by the government in February 2018).

For the hyperinflation facing Venezuela, the launch of the centralized digital currency is considered to be a temporary solution for the country’s cash issuance problems.

Venezuela Shuts Down Crypto Mining Operations

Venezuela, a country known for its volatile political climate, has recently made headlines for shutting down several crypto mining facilities throughout the country. According to reports from local media outlets and tweets from Venezuela’s National Association of Cryptocurrencies, mining operations were ceased in the states of Lara, Carabobo, and Bolívar in the past few days. Although it is unclear how many crypto firms were affected by the shutdown, several crypto exchanges were also ordered to cease their operations.

The closure of crypto mining facilities is believed to be part of an ongoing investigation into corruption involving Venezuela’s state-owned oil company, Petróleos de Venezuela S.A. (PDVSA), and the country’s national crypto department. The Venezuelan government has been grappling with the financial crisis and hyperinflation, leading many to turn to cryptocurrencies as a more stable investment option. However, the mining of cryptocurrencies requires a significant amount of energy, which is often subsidized by the government. As a result, the shutdown of crypto mining facilities could be seen as a way to conserve energy and resources amidst Venezuela’s financial struggles.

Additionally, the corruption investigation involving PDVSA and the national crypto department has been ongoing for several years. PDVSA has been accused of embezzlement and money laundering, with the country’s former oil minister, Rafael Ramirez, at the center of the investigation. The national crypto department, which was created in 2018 to oversee the country’s cryptocurrency operations, has also been under scrutiny for alleged corruption and mismanagement of funds.

The shutdown of crypto mining operations in Venezuela has raised concerns among crypto investors and traders, who are now questioning the government’s stance on cryptocurrencies. While some experts believe that the shutdown is simply a way to conserve energy and resources, others believe that it is part of a larger crackdown on cryptocurrencies in the country. The Venezuelan government has been known to take drastic measures to control the country’s economy, including imposing strict capital controls and devaluing the country’s currency.

In conclusion, the shutdown of crypto mining operations in Venezuela is just one of many challenges facing the country’s cryptocurrency industry. The ongoing corruption investigation involving PDVSA and the national crypto department, coupled with the country’s economic struggles, has created an uncertain future for cryptocurrencies in Venezuela. It remains to be seen how the government will navigate these challenges and what impact they will have on the country’s crypto industry.

Bitfinex Unveils Zero-Fee P2P Trading in Argentina, Colombia, Venezuela

On October 11, 2023, Bitfinex, a leading digital asset trading platform, disclosed the initiation of a zero-fee trading facility for market takers on its Peer-to-Peer (P2P) platform in Argentina, Colombia, and Venezuela. This development follows the recent availability of the P2P trading service to clients within these geographies, further catalyzing the adoption of cryptocurrency trading in the region.

Bitfinex’s announcement underpins its commitment to fortifying the cryptocurrency trading ecosystem within these emerging markets. By abolishing the trading fees for market takers, individuals who execute buy or sell orders at prevailing market rates, the platform is propelling the advantage of real-time crypto-to-crypto settlements sans any financial encumbrances. This initiative is anticipated to spur trading activities by significantly reducing the cost of transactions, which traditionally acts as a barrier for many potential and existing cryptocurrency traders. The immediate financial relief is likely to enhance liquidity and foster a more robust trading environment on the Bitfinex P2P platform.

To avail of the zero-fee trading, users are required to log into their Bitfinex accounts and select the P2P option featured in the top navigation menu.

Established in 2012, Bitfinex has been at the forefront of digital token trading, extending a suite of advanced trading resources to both global traders and liquidity providers. The platform’s diverse offerings encompass peer-to-peer financing, an Over The Counter (OTC) market, and margin trading for a broad spectrum of digital tokens. With a strategic emphasis on delivering superior support, innovative tools, and a seamless trading experience, Bitfinex continues to garner a global clientele.

Crypto Adoption in Latin America: A Tool Against Economic Woes and Authoritarianism

Latin America is carving a unique narrative in the global cryptocurrency landscape, with Venezuela and Argentina standing out due to their distinct socio-economic and political contexts. According to a report by Chainalysis, Latin America ranks seventh in the global crypto economy hierarchy, just ahead of Sub-Saharan Africa. The region’s preference for centralized exchanges (CEXs) over decentralized exchanges (DEXs) is notable, contrasting with global trends. However, the core attraction lies in how cryptocurrency is morphing into a tool against economic adversities in Argentina and a shield against authoritarianism in Venezuela.

Argentina: Crypto as Economic Safeguard

Argentina’s long-standing economic turmoil, accentuated by a 51.6% devaluation of the Argentine peso up till July 2023, has spurred crypto adoption as a defensive mechanism. In this period, the nation led Latin America in raw transaction volume, with an estimated $85.4 billion in value received, showcasing a strong grassroots adoption. Alfonso Martel Seward, Head of Compliance & AML at Argentina-based cryptocurrency exchange Lemon Cash, elucidates that crypto, particularly stablecoins, has become a vital alternative for savings amidst stringent foreign currency acquisition restrictions. This trend is visually evident in the spike of crypto purchasing as the peso devalued, especially around mid-April when Argentina’s inflation rate hit 100% for the first time in three decades.

Lemon Cash has capitalized on this situation, offering a debit card feature enabling users to transact with crypto at local retailers, thus alleviating day-to-day commerce challenges induced by currency instability. The rise of Lemon Cash, amid an active crypto market where about 5 million out of 45.8 million people use crypto, epitomizes the asset class’s capacity to buffer against economic hardships.

Venezuela: Crypto as a Pillar of Resistance

Venezuela’s narrative diverges from Argentina primarily due to its authoritarian governance under Nicolás Maduro. The nation’s economic woes, marked by hyperinflation rates surpassing 1 million percent, have driven many towards crypto, especially stablecoins, to preserve their savings. The crypto adoption trend in Venezuela also extends to enabling remittances, which have burgeoned due to a significant populace exodus since 2014.

A notable dimension is how crypto is fostering resistance against authoritarianism. Venezuelan opposition leader Leopoldo López shared an instance where crypto facilitated direct aid to healthcare workers during the Covid-19 crisis in 2020, bypassing the repressive governmental controls. This initiative, which benefited 65,000 medical professionals directly and impacted hundreds of thousands indirectly, underscores crypto’s potential as a humanitarian aid conduit amidst political repression.

Furthermore, López emphasized that cryptocurrency’s value in supporting democracy movements could be fully realized when the off-ramping process is independent of autocratic regimes, indicating a path towards leveraging crypto for broader societal change.

Venezuela's Petro Cryptocurrency to Cease Operations

The Venezuelan government has officially announced the cessation of its national cryptocurrency, the Petro (PTR), effective January 15, 2024. Launched in 2018, the Petro was touted as an oil-backed digital currency aimed at circumventing U.S. sanctions and alleviating the economic pressures from the devaluation of the bolivar, Venezuela’s fiat currency. However, the Petro’s journey has been fraught with challenges, ultimately leading to its discontinuation.

The Petro’s Struggle for Adoption

The Petro, despite being a pioneering concept, struggled to achieve mass adoption. Introduced at a time when Bitcoin had already established a significant presence in Venezuela, the Petro was unable to displace or even complement the growing popularity of established cryptocurrencies. Its issuance was mandated by President Nicolas Maduro, yet it faced opposition from the parliament and was never declared legal tender. This lack of mandatory acceptance severely limited its domestic usage.

Legal and Operational Challenges

The Petro’s journey was marred by several legal and operational hurdles. Notable among them was the arrest of Joselit Ramirez Camacho, the head of Venezuela’s crypto regulator, on charges related to financial crimes in the national oil industry. Additionally, the Petro’s management faced allegations of involvement in international narcotics trading, which further tarnished its reputation and hindered its adoption.

Petro’s Limited Functionality and International Rejection

The Petro was never traded abroad, despite efforts to promote it to the Bolivarian Alliance for the Peoples of Our America. Domestically, its usage was restricted to certain state operations, such as the payment of taxes and traffic fines, but practical application remained limited. For example, fines levied in Petros could not be paid using the cryptocurrency itself, highlighting its operational limitations.

Closure and Transition to Bolivars

With the Petro’s closure, all crypto wallets on the Patria Platform, previously the sole trading platform for the Petro, will be shut down. The remaining Petros are being converted to bolivars, marking an end to Venezuela’s experiment with an oil-backed digital currency. This transition reflects the broader challenges of implementing national cryptocurrencies, particularly in economically and politically volatile environments.

Conclusion

The Petro’s story is a cautionary tale about the complexities of introducing a national cryptocurrency. It underscores the importance of legal credibility, broad-based acceptance, and practical functionality in the success of such digital currencies. The Petro’s cessation is a significant moment in the history of digital currencies, highlighting the challenges faced by state-backed cryptocurrencies in gaining legitimacy and adoption.