The research company Blockchain Chainalysis has published this Thursday, August 27, a part of its „Chainalysis 2020 Geography of Cryptocurrency Report“, more specifically, a part dedicated to Venezuela. One of the most relevant data that has been published is that within its „Global Crypto Adoption Index“, the South American nation occupies the third place with regards to the use of cryptomoney.
Remittances and escape from hyperinflation have been the main reasons why Venezuelans are so familiar with cryptomonies, as presented by the report. The Petro, the state digital currency of the Nicolás Maduro Administration, also came out within the studies presented.
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Space of Venezuelan exchanges in the ecosystem
Chainalysis‘ researchers stopped to evaluate the Bitcoin Loophole functioning of the exchanges authorized by Nicolas Maduro’s administration in order to determine if they were really being used by the average Venezuelan.
As a case study, the research focused on Criptolago, an exchange that had already been studied previously by the research firm, in order to contrast its numbers and on-chain data.
One of the conclusions reported in the research is that the portal is working as a tool to launder funds from people correlated with Nicolas Maduro. One of the bases they present for this idea is that more than 75% of the transactions that have been made with the exchange are for amounts higher than 1000 dollars, an amount that according to the researchers does not match the average income of Venezuelans.
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Hyperinflation as one of the main drivers for adoption
The reality of the bolivar’s depreciation and the hyperinflation that the Venezuelan economy is going through was also made present in the report. According to the report, this situation is reflected in the P2P markets of crypto currencies operating in the country, which are also one of the main reasons that have led Venezuela to be the third country with the highest use of crypto currencies according to Chainalysis.
The research is focused on the relationship between LocalBitcoins and Venezuela, which they point out is the third most active country in the platform, or the second if measured by „the number of internet users and the purchasing power parity per capita“.
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Among the studies, it is reflected that as hyperinflation in the country increases, so does the volume of P2P trading in Bolivars carried out in portals such as LocalBitcoin, although it is also mentioned that this increase in volumes may be caused by the same increase in hyperinflation itself.
Besides the numbers, the research mentioned that they also made anecdotal studies with people both in Venezuela and in the rest of South America, who also pointed out the increase in interest in cryptomonies not only in the Venezuelan territory, but in the rest of the countries that also show socio-economic problems.