Hyperinflation in Venezuela has made a reality of having to carry suitcases of money in order to buy meals. Bitcoin could replace low denomination notes in the country, prevent the privacy perils of a cashless society and potentially see the first Bitcoinization of a sovereign state.
Venezuela, once the highest wealth per capita country in South America, now has the highest inflation rate in the world with speculation that inflation in the country could potentially reach 1,600%. The country’s previously highest denomination note was the 100 bolivar but with hyperinflation, it is now only worth approximately 2 cents. The country is now printing higher denomination notes to try and aid the issue but is this the best solution?
In what is quickly becoming a cashless society, Bitcoin can restore purchasing power and privacy back to Venezuelans. It does not even require a bank account – just an internet connection and a mobile phone, providing a way for the unbanked in the country to also pay for goods and services. Bitcoinization isn’t a pipe dream in Venezuela and it could very well end up being a necessity.
More of this news here...
I think that the story of Venezuela vis-a-vis Bitcoin is a fascinating one and always a reference of what Bitcoin can do and help when an economy enormously tanks. Many years of wrong economic policies and corruption have lead to the economic meltdown felt by all Venezuelans right now. Bitcoin is now one of the many ways and medium people are coping up with this unfortunate turn of events for a mineral-rich nations at that! We are all then wishing that things would turn out to be better for this country's economy and that things could have bottomed out so that there is no way but up.
