In BriefVenezuela is currently suffering from hyperinflation, which may force the country to shift to Bitcoin. The move would come after months of excessive purchasing and mining, and could be the start of other countries doing the same.
From Bolivars to Bitcoin
In order to deal with ever-growing issues with hyperinflation, the country of Venezuela may soon decide to adopt a new currency: Bitcoin.
As explained by CoinTelegraph, Bitcoin has been the subject of a massive amount of mining and purchasing over the last few months, leading to a number of rumors regarding the country’s desire to incorporate it into their financial structure.
According to Daniel Osorio, from Andean Capital Advisors, Venezuela may be on the verge of forgoing their Bolivar currency. During an interview last week, he told CNBC “we may well be witnessing the first ‘Bitcoinization’ of a sovereign state.”
Osorio went on to explain that Venezuela is more than a week behind on a substantial bond interest payment. At present, it doesn’t have the money to address it or manage the economy. A simple lunch can now cost up to 200,000 Bolivars ($8-$10) prompting people to resort to using Bitcoin or money wires of other foreign currency. Bitcoin is appealing because it’s independent of the black market and tied to a fixed exchange platform, making it difficult to exploit.
First in Line
In August, Venezuela was listed as the top country with a failing currency ahead of Colombia and Argentina, with all ten countries listed expected to turn to Bitcoin or other cryptocurrencies in the near future.
The “bitcoinization” of Venezuela hasn’t happened, despite what many would like to say, so we’ll have to wait to see what actually becomes of the situation. If it does completely shift, however, it could be used as another selling point to get people to adopt the biggest crypto out there.