Deimer González left Venezuela in 2018 with his university degree and some clothes along with a savings of 1.5 BTC in his mobile wallet. What transpired around the world during 2019, offers a microcosm of Venezuelan Bitcoin users. Migrants from Venezuela using bitcoin for payments despite limitations.

González, from Caracas, who completed mechanical engineering and initially worked with Venezuela’s PDVSA, a Venezuelan oil and natural gas company, informed a media source that his savings of 1.5 BTC, enabled him to support his family back in Venezuela, when he was about to begin a new life in Buenos Aires, Argentina.

González mentioned that he could send money back because of his savings, excluding his income in pesos.

In 2019, the amount of money transferred to family members of Venezuelan citizens from foreign countries is projected at $3.7 billion! This represents an increasing source of income for them. Bitcoin and other cryptocurrencies have played a major role in international transactions.

Migrants utilize crypto frequently during the period of relocation because access to financial resources in a new country is often challenging for unemployed immigrants.

This is the case for Wolfang Barrios, Caracas dealer who informed the same media source, that there was no profit in local money when he landed in Chile:

“I didn’t have a stable job, enough money or a bank account. I could send the remittances only using crypto.”

Even with dollars, it is difficult to support a family in Venezuela. In May Luis Oliveros, a Venezuelan economist, estimated the cost of living for a family of five in the country to be at $900 a month for living, wherein, requiring around $300 a month for a basic food basket. Within this context, Venezuela’s minimum wage is currently $15 a month, although economists suspect that it will not last long.

For González, the previous monthly income was $5 as an employee at PDVSA, but his Bitcoin transfers offer considerable support to his family.

According to González, at present, he transfers $50 (worth of Bitcoin), but it is not worth a thing, further elaborating that both his parents are required to work in order to survive, without any intention of leaving the country.

The remittance business

Perhaps crypto-transfer companies will continue to grow in Venezuela, because of all these challenges.

One of the merchants, who requested that only his first name be mentioned, Jesús, is employed with the Peru-Venezuela Regional Remissions network, Local Remesas.

He claimed that they receive $200,00 to $300,000 a month, and explained how the network where he works, currently exchanges pesos for Bitcoin, which later gets exchanged for the Venezuelan Currency, bolivares.

The most important outcome showcases a fiat-to-crypto exchange as a profitable business in Venezuela.

Peru is the second choice for Venezuelan immigrants, according to the Migration and Immigration Police of the country, with more than 865,000 immigrants arriving to date. Even the government of Nicolás Maduro launched its new payment platform, using Petro (PTR) based on a blockchain network.

For Jesús, the key to swapping at the best price is through direct contacts:

“LocalBitcoins is about 3 percent more expensive than using my own contacts.”

Here’s the catch

Nevertheless, crypto transfers are only a final option for many of these Bitcoin users.

The bolivar trade has been very beneficial for those who reside in Venezuela, with a regular inflation rate of 3% and a persistent devaluation. Some bitcoin users tend to use fiat in other areas of Latin America, as long as the condition is permanent.

Venezuela-based crypto enthusiast Mariluna De La Concha, who now resides in Mexico said that from 2016 to early 2019 she sent a crypto transfer to her family. Currently, she transfers only pesos to her mother.

She stated that it is not easy to exchange crypto. However, one gets good value for crypto in Venezuela because of the inflation, nevertheless, it is a costly affair for her from Mexico.

The decision to uses costly and compliant exchange sites was also a matter of safety for Mariluna. The private chat groups of Venezuela explicitly report numerous instances of fraud wherein the U.S. bank accounts of Venezuelan users were reported and blocked following a transaction.

An unnamed source reported that there was a feeling among users that the exchange platforms’ activities were monitored by the government law enforcement agency in order to harass Bitcoin users.

Going back to González, the mechanical engineer who left the country in 2018, he mentioned the situation motivated him to transfer more fiat currency to his family in Venezuela. He further stated:

“I’m more of a [bitcoin] holder now.”

Leave a Reply

Please Login to comment

Leave a Reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Notify of