Amidst a struggling economy, Venezuela has seen crypto remittances surge higher in recent times, as it has become a better asset class than most others in the country.
A leading news daily has reported how crypto remittances have increased in Venezuela. It coincides with an economic crisis in the country, which has also faced high inflation. As per the report, crypto remittances amounted to around 9% of the overall remittances to the country. It hovered around $461 million.
Unlike fiat currencies prone to inflation due to government printing, many crypto tokens have a capped supply. Bitcoin, for example, has a limited supply, making it a potential hedge against inflation.
Another report by a crypto analytics firm has noted how this trend has existed since 2018. Except 2020, Venezuela received a good chunk of remittances in crypto each year since 2018. The report also highlighted how crypto has also been useful in delivering aid in the country, with rising crypto adoption each year.
It stated how crypto adoption could “provide an important reminder of the potential this still-young technology has to foster freedom and improve quality of life in the places that most need both.”
At the same time, crypto payments are also gradually becoming popular, with better use cases over time. The world has seen multiple instances of financial services firms adopting crypto payments for their users.
Other advantages of crypto, including remittances and cross-border transfers, have also become prominent. Traditional money transfers can be slow and expensive, with intermediaries taking hefty fees. Crypto transactions are peer-to-peer, eliminating intermediaries and significantly reducing transaction costs. They also settle much faster, often within minutes, compared to days for traditional methods.
Unlike fiat currencies restricted by geographic borders, crypto tokens have the same applicability globally. This allows for seamless cross-border transactions, regardless of the sender’s or receiver’s location.
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