Venezuela, currently undergoing a monetary crisis which makes its central currency increasingly unusable, has been turning to cryptocurrency in a big way. Now, the first Bitcoin ATM is being installed.
The plan was announced in an interview by Union Radio with Jorge Farias, the CEO of CryptoBuyers. The company hopes to install the first machine within two weeks, and according to Blockmanity, plans to help teach citizens how to use them to buy and exchange Bitcoin.
The government of Venezuela has been attempting to forestall the worst of the excessive inflation of their currency the Bolivar by introducing the state-backed cryptocurrency the Petro, but it has proved ineffective and remains heavily criticized by outside observers. Dash has been making headways in adoption in the country, with a number of huge international retailers reportedly taking the cryptotoken along with the increased use of a text-based Dash payment network finding purchase. While Venezuelan’s gaining the ability to purchase goods and services as well as exchange goods is certainly a welcome change, unless Venezuelan companies and citizens can utilize crypto themselves, there will be a massive exodus of capital as Venezuelans will be pushed to buy from foreign companies rather than amongst themselves.
Bitcoin is making a strong play as well, with Traki, a major regional department store chain, is now reportedly accepting Bitcoin. If other Venezuelan companies can integrate Bitcoin payments themselves, and Bitcoin ATM service as well as cryptocurrency payment networks can be set up, Venezuela has a better chance of building up a more robust economy. For the last six months, P2P Bitcoin trading network LocalBitcoins has exploded in use. Recently, however according to Bitcoinist, the service has apparently stopped working for users. Whether LocalBitcoins can resolve their service issues in the area or if a competing service will come to take its place remains to be seen, but there is a clear and growing desire for OTC Bitcoin trading in Venezuela.
Even in this case, problematically, most of these transactions will be untaxed, and the state of Venezuela will continue to have problems funding its nationalized industries and social programs, which will likely lead it towards more foreign borrowing, which is what caused the monetary crisis in the first place. There is a real possibility that a growing crypto economy paired with a state which isn’t making enough from its crude oil exports will continue to disenfranchise a central government which is already facing public backlash. Venezuela may in fact end up moving towards stronger regulation and acceptance of Bitcoin and the use of crypto if that is where the population goes in order to have a usable money.