There’s been indication, based on research, that Bitcoin is currently being used as a vehicle currency by Latin Americans primarily for the purpose of aiding people to buy and sell in and out of Venezuela.
Research fellow and data scientist at dlab, Matt Ahlborg, made a research into data on LocalBitcoins.com, the largest Bitcoin trading platform in Venezuela and while examining the week around March 7th, 2019, the date the country had it’s largest electrical blackout ever, he discovered that Bitcoin-to-bolivar trades were down during and after the blackout. He however noted that Bitcoin trading volumes on LocalBitcoins for that time period surged in other Latin American currencies as well.
“In the Latin American markets of LocalBitcoins, our research indicates that Bitcoin is primarily being used as an intermediate currency between fiat currencies for people transferring value in and out of Venezuela. When the lights go out in Venezuela, Bitcoin trades across Latin America dive as well because money transmitters outside of Venezuela are no longer able to communicate with their counterparties in the country to complete the cross-border value transfer.” he said.
Venezuelans working overseas have devised a means of bypassing the Venezuelan government’s strict currency controls by buying Bitcoin and then selling it for bolivars.
He further observed that LocalBitcoins aided the sale of Bolivars to the tune of $315 million last year alone, a development he noted was evident of the digital assets such as the internet.
He had this to say, “Bitcoin, and more broadly the internet as a whole, has begun to poke holes in the once walled monetary gardens of the past. Cross-border transfers which once took place on government sanctioned banking infrastructure are now operating permissionlessly through the internet. And as the government of Venezuela learned after spending years trying in vain to control the flow of money across its borders, guarding the door is not enough anymore because this new technology is sneaking in through the chimney.”