Venezuela’s inflation problem seems to worsen by the day with the recent devaluation of their official Bolivar currency by another 95% & linking it to their national oil backed cryptocurrency Petro hasn’t helped stem the hyperinflation which is bound to hit a 1,000,000% this year. This has created a crisis like situation in the Latin American country where people are having trouble in even meeting their daily dietary needs. The poverty rates have hit alarming proportions compelling people to either flee the country (2.3 million) or turn to another source for survival – Cryptocurrencies!
And while Venezuela is a prime example of how Cryptocurrencies have literally replaced the traditional fiat based monetary system other countries like Iran plagued by economic sanctions & emerging markets like Turkey, South Africa & Argentina are seeing soaring interest in the digital assets as their national currencies flounder. The peer-to-peer local crypto exchange in Venezuela shows a spike in transaction volume depicting the same exponential trajectory as the inflation. It is pretty evident that a growing number of people in the country are moving towards digital assets as a store of value & means of transaction.
Bitcoin is the most preferred choice of digital money around the world but Venezuela has seen quite a few Cryptos occupy the monetary space. NANO community came forward earlier this year to help feed the hungry with online donations through a Reddit campaign. EatBCH is another such initiative which is helping feed the hungry in South Sudan & Venezuela using the Crypto coin BitcoinCash. But the true savior came in the form of DASH – the 11th most popular cryptocurrency by marketcap. A brief introduction here would probably be helpful for those of you who don’t know much about the digital asset. DASH emerged as an open privacy-centric cryptocurrency in 2014. Originally known as the Darkcoin with a promise of anonymous transactions, it has re-branded itself to the current form of a utility driven, low transaction fee ($0.08 at the time of writing) & instant approval digital asset which has come as a savior to the people of Venezuela where the volume traded in Dash is even higher than Bitcoin.
Venezuela has become the second biggest market for DASH after the United States, ever since it was added to the Caracas-based Cryptobuyer exchange as a tradable digital coin in 2016. The CEO of South American cryptocurrency exchange recently commented:
“Cryptobuyer was the first platform in Latin America to integrate Dash in early 2017, as well as the first to offer it in Venezuela. Every month, we see how Bitcoin and Dash fight for the top volume in our operations, but as for the largest number of transactions, Dash is winning at this time.”
So how did DASH end up being so popular in Venezuela? I mean apart from the features already discussed like low transaction fees (in pennies), fast processing & the privacy features. Keep in mind that Scalability issues have been one of the major hurdles in the adoption of the Cryptocurrencies. But for DASH one of the biggest reasons for the mass scale adoption of the Crypto in Venezuela has been the funding of ground-level projects by the DASH Core group which owns the digital coin. DASH is distinct this way, while most Cryptocurrencies have no sustainable way for developing the market for themselves, it maintains a pool of funds (10%) from every transaction processed, which eventually goes towards supporting DASH adoption in different markets.
The encouragement of merchant adoption by the DASH core group has led to its biggest growth in Venezuela with more businesses accepting the cryptocurrency as a means of monetary transactions than ever before. At the current time, almost a 1,000 vendors in the country are accepting DASH with more being added every day. In fact, according to Discover Dash, an online business directory for DASH, reported the week before that 94 more merchants added their support for the Crypto. Pretty evident that the adoption is picking up the pace & gaining widespread traction.
And while the fate of Cryptocurrencies hangs in balance with the current bloodbath they are facing in the tradable markets, the dream of Crypto enthusiasts of digital coins one day replacing the fiat based currencies is increasingly becoming a real possibility with a use case like Venezuela. Time for the financial & regulatory authorities to debate the merits & demerits of Cryptocurrencies is running out.