In the last month, John Villar has bought two plane tickets to Colombia, purchased his wife’s medication and paid the employees of his startup business in Venezuela — all in bitcoin.
As Venezuela’s national currency loses value at a catastrophic rate, thousands have begun turning to the world of cryptocurrency to salvage what little value remains from their increasingly worthless bolivars.
“This is not a matter of politics,” Villar said. “This is a matter of survival.”
Both poor Venezuelan retirees and wealthy business leaders are converting their bolivars into bitcoins online and then using the digital currency to pay for everything from doctor appointments and honeymoons to motorcycles and artisanal beer. The transactions are relatively swift for anyone with a smartphone: Websites like LocalBitcoin and Colibit function as exchanges where Venezuelans can buy and sell bitcoins using a local bank account.
The shift toward cryptocurrencies in Venezuela is taking place as the price of bitcoin has climbed to a peak of more than $17,000 this month. The digital currency debuted on a major U.S. exchange with its first futures contract Sunday. But while bitcoin is a speculative venture in developed nations, in Venezuela it has become a tool to keep families afloat, with some Venezuelans purchasing a small fraction of one coin to build their savings.
The number of Venezuelans using cryptocurrencies remains unclear, but weekly bitcoin trading volume through one popular website has soared from about $225,000 earlier this year to nearly $2.1 million in the first week of December — this in a country where the monthly minimum wage fetches less than $2 on the black market. According to data website Coin Dance, that’s far higher than the value of bitcoin transactions on the same website seen in more prosperous nations across the region, including Argentina, Brazil and Chile.
“Venezuelans are taking refuge in digital currencies,” said Rafael Useche, the founder of Colibit.