Venezuela has an unstable economy and its currency has been hit by inflation beyond 1000%. Destinia, a Venezuelan online travel agency, will now only accept Bitcoin for payment for its services citing “increasing restrictions” and economic woes in the country.
Venezuela’s economic woes look to be very far from ending their effects on small and Medium scale enterprises (SMEs) operating from within Venezuela. Many small and medium scale businesses have bitten the dust due to the economic problems faced by the country.
“Destinia started using bitcoin as a means of payment for its services way back in 2014. Bitcoin users pay higher fees than the other users who pay using local currencies. This means the company gains more when bitcoin is used than the local currency. The hyperinflation has made the Venezuelan Bolivar obsolete to the USD. Bitcoin is superior to the USD with a very high exchange rate.”
It would be one of the best advantages bitcoin has ever had if using bitcoin could help offset the economic crisis in Venezuela. Coinidol.com spoke to Anny Qiaochu LI, an inflation expert at Deutsche Bank, a Germany-based international investment bank, about how this phenomenon could be possible. She commented to Coinidol.com:
“Venezuela cannot in any way make bitcoin become the alternative currency to be used in the country. This is because of very many different reasons, one of them being the fact that bitcoin is an electronic currency and a sizeable percentage of the population could not be having access to electricity. The thing is, bitcoin can help save individuals but not the economy.”
Inflation has made the Venezuelan bolivar of very little value, making it too inferior in front of bitcoin. Coinidol.com asked Kevin Charles, CEO & Founder of Surbitcoin.com, a Venezuela-based bitcoin exchange, about how people obtain bitcoin in Venezuela. He responded:
“There are numerous companies operating bitcoin ATM’s in Venezuela. People can use the local currency to obtain bitcoins from these ATMs. The majority of working people in Venezuela want to leave the country in the hope of a better future elsewhere in another country. The inflation would mean one would require incredible a lot of money to buy some useful bitcoins. Some people get bitcoin from money sent from abroad from their relatives and friends. The situation in Venezuela is just unthinkable.”