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According to published data on changes in the Consumer Price Index (CPI) of Latin American countries, at the end of the first quarter of this year, Venezuela and the United States. Argentina have the highest inflation levels in the region. A scenario that has led the population to resort to the use of cryptocurrencies as an option to guard against devaluation.
With cumulative inflation, up to April 2018, 9.7% in Argentina and 897% in Venezuela (according to the calculations of the Venezuelan National Assembly), the two countries are facing economic problems that have led to inflationary crises that have worsened so far this year. However, inflation is not the only feature that they have in common, as both countries have also experienced a boom in the adoption of Bitcoin.
The potential for adoption of Bitcoin in the two South American countries has been highlighted since 2016 a study by academic Garrick Hileman, of the University of Cambridge School and the School of Economics in London, determined that both nations had a higher score in the indicator Bitcoin Market Potential Index (BMPI), used to measure the potential of some 178 countries to adopt the new technology
In the case of Venezuela, the increase in the flow of its volumes of buying and selling bitcoins (BTC) is remarkable, a phenomenon that has increased since last year. and that qualifies this nation as the territory with largest number of cryptocurrency transactions in Latin America .
According to data from Indeed, at the end of the last week of June, the Caribbean country recorded a volume greater than 10 trillion bolivars (521 BTC) on the platform of exchange of Localbitcoins; This figure represents about 45% more than the volume recorded at the beginning of the same month, when transactions were in the order of 6.9 trillion bolivars.
Venezuela, subject for more than a decade to strict control of change, has seen a brutal collapse of its mother currency in this year, due to the outbreak of the phenomenon of hyperinflation.
This situation led the population to seek new methods of payment, investment and savings, among which the use of cryptocurrencies is developing as a viable and safe alternative, whereas currently there is no local regulation that regulates or prohibits this type of exchange. Despite the fact that last April, the government created a government entity to oversee the sector, some government spokesmen have announced measures to monitor national bank accounts dealing with crypto-active
despite the fact that the government has not yet been able to monitor the sector. impossibility of acquiring foreign currency. , the Venezuelan public even chooses to use crypto-currency exchange platforms to mark the exchange rate of the US dollar against the bolivar.
At the same time, more and more merchants are adopting cryptocurrencies facilitating the purchase of various products such as, jewelry, restaurant services, medical consultations, among others. In this regard, the website Criptolugares has registered 184 stores across Venezuela that receive in payment BTC, ETH, LTC and DASH
A pioneering market in Argentina
In Argentina, despite the cessation of exchange controls in 2015 citizens continue to observe how their income and savings are devalued to the same extent as the Argentine peso. Inflation has led to an increase in demand for dollars, which in turn has generated low currency availability. This fact paved the way for the use of cryptocurrencies as a store of value, which helped some of the population recover the purchasing power and value of their savings without government intervention.
Argentina maintains commercial volumes in Localbitcoins more or less constant oscillating between three and four million Argentine pesos, in the weeks passed from May to June 2018, according to the figures of the coin (approximately 24 BTC in the week of June)
The southern country was one of the pioneers in the use of bitcoin in Latin America, given the exchange rate restrictions known for several years. In this way, Argentina has become a reference center for the development of the cryptocurrency and blockchain technology markets. There are about 200 Bitcoin ATMs in the country and Buenos Aires, the capital, has 145 independent companies, organizations and professionals who accept bitcoins for their products and services. In addition, the government is receptive to the opportunities offered by cryptographic currencies as part of the national economy and is willing to discuss their use.
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