Venezuela Is Now More Than 50% Dollarized, Study Finds

[alyssa85]

https://www.bloomberg.com/news/articles/2019-11-05/venezuela-is-now-more-than-50-dollarized-study-finds

Venezuela’s economy is increasingly dollarized, with more than half of retail transactions now being carried out in U.S. currency, a study found.

An estimated 54% of all sales in Venezuela last month were in dollars, according to a survey by Econoalitica, a Caracas-based research firm.

In Maracaibo, the country’s second-largest city, about 86% of all transactions took place in dollars, according to the study. The city has been one of the worst hit by blackouts, which has rendered credit card readers useless for days on end.

As Venezuela has become dollarized, inflation has come down. Even their idiot president Maduro admits the dollarization (which was done by citizens spontaneously ignoring their govt's ban on dollars) is a good thing.

A year ago, some of us were hoping that Venezuelans would have adopted bitcoin as their currency (or an alt). But the rolling electricity blackouts not only mean you can't use credit cards, but you can't use cryptocurrency. So they've gone with old fashioned US dollars in cash.

This whole real life case study shows that cryptocurrency won't get adopted in poor countries (because of lack of electricty). It will get adopted in rich countries - rich regulated countries.

[mu_enrico]

Yeah, they need a stable currency. What could be better than USD as a medium of exchange? Bitcoin surely was not ready to be used as cash to purchase daily needs. However, it doesn't mean that Bitcoin is useless. We know that Bitcoin is more difficult to confiscate so that it can be used as a store of value. This is important for the people who live in an authoritarian government.

They can store some of their wealth in Bitcoin and cash out when they need to buy stuff.

[bitbunnny]

Yeah, they need a stable currency. What could be better than USD as a medium of exchange? Bitcoin surely was not ready to be used as cash to purchase daily needs. However, it doesn't mean that Bitcoin is useless. We know that Bitcoin is more difficult to confiscate so that it can be used as a store of value. This is important for the people who live in an authoritarian government.

They can store some of their wealth in Bitcoin and cash out when they need to buy stuff.

They need stable currency, that is true. But is it foreign currency solution? This is also the way that one country colonize the other, in a way. Bitcoin can't help the country, it can only be support for individuals but it can't save economy and financial system in Venezuela. They need help but not in a way that will longterm only make them weaker and more vulnerable.

[alyssa85]

Yeah, they need a stable currency. What could be better than USD as a medium of exchange? Bitcoin surely was not ready to be used as cash to purchase daily needs. However, it doesn't mean that Bitcoin is useless. We know that Bitcoin is more difficult to confiscate so that it can be used as a store of value. This is important for the people who live in an authoritarian government.

They can store some of their wealth in Bitcoin and cash out when they need to buy stuff.

Yes. Maybe the crisis in Venezuela came too soon for bitcoin to benefit instead of the US dollar.

But this case study does mean one of the bitcoin myths bites the dust (that bitcoin will help the unbanked and the poor).

[moviebuff777]

That’s true and those in poor countries may not have access to a computer or smartphone anyway, so even with electricity, they may not be able to transfer Bitcoins or any kind of cryptocurrency or digital currency.

[arbifahrozy]

like people said,the new thing need a time for adaptation. crytocurrency can't be adaption so easly,even for poor country like venezuela. the country will have no value after,because they doesn't have a national currency. and now they using dollar,as long the currency have a stable value,i guess its ok.

[Wexnident]

Well, Bitcoin has the label of only those being on the well offside of life can buy them, so It isn't surprising for other countries to put a hold towards their crypto department/adoptation. But that is only for now though. If the world continues to grow, even if countries at the bottom stay at the bottom, at the bare minimum, they should've gotten access towards old tech right? If the big countries have let's say an analogy of 10x Better tech, then the small countries would at least have the 1x as scraps of the big countries right? Crypto right now is kind of rare and unaccessible by not so rich countries cause the adoption still has a lot of difficulties to tackle. Rich countries encounter this, what more of others right?

[hugeblack]

I do not think that the reports that talk about the economic situation in Venezuela will be very accurate. Many political events make the possible inflating of statistics.

Also, the reason why Bitcoin is not used does not seem logical. Bitcoin is used for investment, so the power cut will not be a source of concern, especially with the fluctuation of the currency. You also need a little energy (10 Min enough for phone/PC) to send or receive currencies.

Also, you will not need the Internet and other restrictions.

[The Sceptical Chymist]

A year ago, some of us were hoping that Venezuelans would have adopted bitcoin as their currency (or an alt). But the rolling electricity blackouts not only mean you can't use credit cards, but you can't use cryptocurrency. So they've gone with old fashioned US dollars in cash.

Yeah, that's one of the big drawbacks of trying to use crypto when SHTF--if there's no power, there's no way to send it unless you can at least keep your cell phone charged, and even then it's not reliable. 

But it doesn't surprise me that Venezuelans opted to go with the USD as a replacement currency.  A few other South American countries have been using it as a backup currency for a long time anyway.  I've heard that most of the use those dollar coins see that the US mint keeps making is down in S. America, and I heard that well before the crisis in Venezuela. 

As an aside, I watched a few Youtube videos dealing with Dash and their foundation's attempt to bring Dash to Venezuela.  They made it seem as if they were doing a decent job of getting the citizens to start using it, but I still had no doubt that no cryptocurrency would gain as much popularity as the USD.  You really need physical cash when there's a crisis, and there's no getting around that fact.

[alyssa85]

You really need physical cash when there's a crisis, and there's no getting around that fact.

Yes.

And that makes me feel that the push for "cashless" societies is really dangerous. Fiat needs to exist, and it needs to exist in cash form just as a backup in case there was an emergency.

Emergencies can occur in wealthy countries too - like if a hostile nation attacked the electricity grid.

[royalfestus]

Investing in cryptocurrency might require high fund but trading cryptocurrency does not necessarily require high fund. Although bitcoin may look high price to venture into, thats why satoshi can take go round as individual can acquire.Solving Inflation goes beyond the adoption of dollar to settle the economic situation, government do more into production, international exchange, corruption and other economic management policies.

[squatz1]

I do not think that the reports that talk about the economic situation in Venezuela will be very accurate. Many political events make the possible inflating of statistics.

Also, the reason why Bitcoin is not used does not seem logical. Bitcoin is used for investment, so the power cut will not be a source of concern, especially with the fluctuation of the currency. You also need a little energy (10 Min enough for phone/PC) to send or receive currencies.

Also, you will not need the Internet and other restrictions.

Accurate on whos side? The reporters from the West who are going to talk about it in a negative way (which it should be reported as, because the situation is bad)

The Venezuelans are probably saying that everything is okay and that nothing could be better right about now (which yet again, couldn't be farther from the truth) The situation in Venezuela is bad, and it's bad because of their government. This is what socialism and communism does to a country.

[CarnagexD]

https://www.bloomberg.com/news/articles/2019-11-05/venezuela-is-now-more-than-50-dollarized-study-finds

Venezuela’s economy is increasingly dollarized, with more than half of retail transactions now being carried out in U.S. currency, a study found.

An estimated 54% of all sales in Venezuela last month were in dollars, according to a survey by Econoalitica, a Caracas-based research firm.

In Maracaibo, the country’s second-largest city, about 86% of all transactions took place in dollars, according to the study. The city has been one of the worst hit by blackouts, which has rendered credit card readers useless for days on end.

As Venezuela has become dollarized, inflation has come down. Even their idiot president Maduro admits the dollarization (which was done by citizens spontaneously ignoring their govt's ban on dollars) is a good thing.

A year ago, some of us were hoping that Venezuelans would have adopted bitcoin as their currency (or an alt). But the rolling electricity blackouts not only mean you can't use credit cards, but you can't use cryptocurrency. So they've gone with old fashioned US dollars in cash.

This whole real life case study shows that cryptocurrency won't get adopted in poor countries (because of lack of electricty). It will get adopted in rich countries - rich regulated countries.

You have a good point, underdeveloped countries will definitely have a hard time adopting bitcoin as their currency. However, this can be solved easily if not only for their president, for the record, solar energy and pther renewable resources are much cheaper compared to the traditional fossil fuel burning, which also disrupts the ecology of the location. These things can be considered and be used as permanent solutions to problems they face electricitiy-wise.

[panganib999]

Investing in cryptocurrency might require high fund but trading cryptocurrency does not necessarily require high fund. Although bitcoin may look high price to venture into, thats why satoshi can take go round as individual can acquire.Solving Inflation goes beyond the adoption of dollar to settle the economic situation, government do more into production, international exchange, corruption and other economic management policies.

Venezuela had issues with their economy situation, not with trading issues sadly. Usage of dollar helped them alleviate the problem, but without fully adopting it, problems would still probably arise, that is until they are able to manage their own currency, or they fully adopt the usage of dollar in their country.

Poor countries would probably have the ability to adapt to crypto in the long term, just not now. Crypto is considered more right now as an investment, and naturally, only those abled countries could possibly trade them. Especially with the requirement of electricity and Internet access.

[audaciousbeing]

Dollarizing their economy as a succor to inflation is just a call to calamity which is about to befall them. If they thinking that is the solution to their problem, they better start to have a rethink because should the United States just slam them with trade embargo or some sanctions for whatever reasons, without any external intervention, the country will explode in a matter of time.

While no country can live as an island, it is expedient for the country to a large extent be self sufficient because of the people in the country themselves. What a reasonable government ought to do is to ensure that the regulations are followed and banks are the ones to drive such policy but it seems the leader of the country is weak to protect his country from the doom that is about to befall them.

[LUCKMCFLY]

~snip~

If we measure inflation in terms of local currency, it is in free fall, there is no way to stop it, the use of dollars makes the money in local currency move in favor of buying and selling dollars, not to mention the amount of money to the that goes the cash Colombia where they take advantage of the paper money for other types of businesses.

If it is dollarized, people move more dollars, but the government does not have the dollar as a payment currency, it only moves the bolivar and is trying to implement the petro, which caused a great fall in the economy, it is like the printing of currency fiat, the only thing is that this time it was digital.

There is no liquidity, what they do is create more inflation to obtain liquidity for the government, something that very few know is that much more money moves on the border with Colombia than in the capital of Caracas. The businesses that are generated on the border with Colombia are at 1000%. It is clearly a scenario in which Bitcoin turns out to be the best refuge of value for particular economies in Venezuela, gold too, but due to lack of knowledge in most people, Bitcoin is managed by those who know how to do it, since whether in trade or investment. The only thing that has served inflation is for the adoption of Bitcoin to be bigger every day, it is for that same reason the high volumes of trade generated in Venezuela that can be searched on localbitcoins.com.

[yoseph]

Can't blame the retailers for accepting a foreign currency when theirs is plummeting on a daily basis. They might end up losing a lot of money due to the unstability of the Bolivar. I still don't know what happened to their very own cryptocurrency which is the petro. It's such a shame that a once great country under Hugo Chavez should sink this low and talking about economical greatness in this scenario.

[Febo]

A year ago, some of us were hoping that Venezuelans would have adopted bitcoin as their currency (or an alt). But the rolling electricity blackouts not only mean you can't use credit cards, but you can't use cryptocurrency. So they've gone with old fashioned US dollars in cash.

There will be new Venezuela's in the future. As they were in past. If Bitcoin is not ready now for Venezuela it will be ready then. What is happening n Venezuela now will for sure help for Bitcoin to get ready faster.

[dothebeats]

They're forced to use it even if they don't want to. Imagine having your own currency shitting the bed and you have a president that wants to push his delusions further into everyone's throats and make use of it in all transactions exclusively. With the blackouts happening more often than ever on the said country, I don't think digital cash or cryptocurrencies would thrive in the situation, especially not in cases where power is unavailable.

There will come a time when President Maduro would order the halt of USD transactions and order people to only use the Petro dollar--or I believe it is happening as of this very moment--in his false hopes that it will salvage their economy. It is beyond repair, and the conditions are only worsening every time. If there's anything that can help it, it would be to cling into an outside economy, though I doubt anyone would every want to help Venezuela at this point in time.

[asus09]

A year ago, some of us were hoping that Venezuelans would have adopted bitcoin as their currency (or an alt). But the rolling electricity blackouts not only mean you can't use credit cards, but you can't use cryptocurrency. So they've gone with old fashioned US dollars in cash.

There will be new Venezuela's in the future. As they were in past. If Bitcoin is not ready now for Venezuela it will be ready then. What is happening n Venezuela now will for sure help for Bitcoin to get ready faster.

New era for venecuela become bigger country by accepting bitcoin and altcoin as digital currency payment, after seeing how their cash money not have value any more become stronger way why have to accept bitcoin as digital legal payment currency and give opportunity to earn profit with bitcoin and altcoin payment way.