A cryptocurrency is making huge inroads in Venezuela as inflation runs wild – and it’s not bitcoin or the Petro
- Venezuela is currently suffering from hyperinflation and the president recently devalued the currency by 95%.
- Locals are turning to cryptocurrencies as a more stable store of value and means to transact.
- 200 merchants per month are signing up to accept Dash in Venezuela, according to the Dash Core Group, and the rate of adoption is accelerating.
LONDON – Cryptocurrency Dash is seeing a surge in new merchant sign-ups and wallet downloads in Venezuela as hyperinflation in the country runs wild.
Venezuela is forecast to see inflation of as much as 1,000,000% this year, with locals needing stacks and stacks of cash just to buy food. Socialist President Nicolas Maduro last weekend announced a series of measures aimed at stabilizing the economy, including devaluing the bolivar by 95% and pegging it to the state-backed cryptocurrency, the Petro.
However, another, non-state backed cryptocurrency is apparently catching on: Dash.
“We are seeing tens of thousands of wallet downloads from the country each month,” Ryan Taylor, the CEO of the Dash Core Group, told Business Insider. “Earlier this year, Venezuela became our number two market even ahead of China and Russia, which are of course huge into cryptocurrency right now.”
The BBC reported on Wednesday that Venezuela is “a paralyzed country” after the economic changes over the weekend. Cash withdrawals are being restricted and there is confusion over how exactly the new system works.
Venezuelans are turning to cryptocurrencies as a way to store value as the Venezuelan bolivar’s exchange rate spirals out of control.
Dash is an open source cryptocurrency created in 2014. It has low fees and near-instant transactions. Dash is currently the 14th largest cryptocurrency in the world, according to CoinMarketCap.com, with just over $1 billion-worth in circulation.
The Dash Core Group, which Taylor heads, is owned by the payment network that Dash runs on. The Core Group services the network and its funding comes from mining fees that are generated by the network.
As well as wallet downloads, which consumers need to hold and spend Dash, Taylor said the cryptocurrency is seeing strong adoption with merchants too.
“It took them a long time to get the first 50, first 100 [retailers],” Taylor, who is based in Arizona, told Business Insider on a call last week. “But at the beginning of July the number was around 400, and we’re already at 800. We’re at this point signing up more than 200 a month.”
Brand names including Subway and Calvin Klein have signed up to accept Dash in Venezuela, Taylor said.
“Effectively, even if I accept a credit card, three days later when the funds hit my account, it’s worth significantly less in Venezuela than when the authorization went through,” he told BI. “This is a problem that cryptocurrency can solve. Our instant transactions can solve it and the relative stability of our cryptocurrency is better than their fiat currency.”
Responding to questions over email this week, Taylor said adoption in Venezuela has accelerated even faster after Maduro’s latest ……………>
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Author: OSCAR WILLIAMS-GRUT
Original link: https://www.businessinsider.in/a-cryptocurrency-is-making-huge-inroads-in-venezuela-as-inflation-runs-wild-and-its-not-bitcoin-or-the-petro/articleshow/65499771.cms