Venezuela Closes Banks Amidst Coronavirus Pandemic, Citizens Turn to Cryptocurrency

The Venzuelan government has taken the bold move to shut down all banks in the country in a desperate attempt to control the spread of coronavirus. Recent data indicate rapid upward movements in the volume of Peer-to-peer trading of cryptocurrency within the country as citizens try to remain liquid during the coronavirus pandemic.

The shutting down of the Venezuelan financial system is a direct trigger to the upward growth in the use of cryptocurrency in the country. Venezuellan President Nicolus Maduro previously introduced a government backed cryptocurrency, the Pretro which didn't gain much support from the population. However with all banks closed Venezueallans are embracing cryptocurrencies like Bitcoin and Petro to gain popularity within the country.

Bank Closure to Trigger a Surge in Crypto

At the beginning of this year, president Maduro made another attempt to market the country’s cryptocurrency, the Petro, but in vain. Mr Maduro proposed that all oil and gas trades in Venezuela would be financed using the Petro coin. The idea did not succeed as oil trading companies lacked interest in the Petro coin.

Venezuela is not the only country turning to cryptocurrencies to relieve the pressure of the COVID-19 pandemic. Coinidol.com, a world blockchain news outlet, has recently reported an increased interest in cryptocurrency amidst the coronavirus crisis by countries such as China and Hungary.

Coronavirus Worsens Venezuela’s Existing Socioeconomic and Political Situation

Even before the outbreak of the coronavirus, Venezuela was already bleeding from a political and economic crisis. The country’s currency lost value and millions of its citizens lost their jobs forcing massive migration to other countries. Venezuela also recently experienced it’s share of political turmoil which started during former president Hugo Chávez’s regime.

Venezuela already had massive food shortages, high crime rates and unemployment indicating the country’s incapacity to contain the coronavirus pandemic. Amidst all the crisis, the country also experienced a massive brain drain with most of its doctors immigrating to the United States seeking better standards of living.

However, the country’s government promised not to give up on it’s people. The government revealed that some aspects of the banking institution shall remain functioning amidst the corona virus shutdown. ATMs, Internet Banking and mobile payments shall remain opened. Other non contact means were also promised to be made available.