It may fall out of the headlines at times, but the profound political, economic, and social crisis in Venezuela continues to deepen.
At this point, more than four million Venezuelans have fled their homeland searching for a better life, or indeed, merely for survival. In a country on the brink of collapse, could the first Bitcoin ATM in Venezuela be of any assistance at all?
The worsening humanitarian crisis in Venezuela
Venezuelans face multiple problems. For the few who can access enough of the national currency, the bolivar, to buy food or other items, they must do it quickly before inflation outstrips the value of their money.
Yet, just accessing the bolivar is a near-impossible feat. With endless lines at banks and banks with restricted supply, many go home empty-handed. Those who want to pay with a debit or credit card have a fresh set of problems – limits that don’t permit them to take out enough bolivares to buy even basic goods. Then there’s the fact that supplies of anything from medicine to staple goods are few and far between.
Amidst rising protests, social unrest, and working professionals who can’t access money to put food on the table, it’s not surprising that around 15% of the country’s population has left. Venezuelans have displaced themselves throughout Latin America and the globe, even heading to Caribbean islands to seek refuge.
For the people left in Venezuela, life is incredibly hard. When your national currency lets you down and simply paying for things presents a challenge, it’s unsurprising that its people turn to alternative methods.
Bitcoin and Dash are gaining popularity
Cryptocurrencies like Bitcoin and Dash have been gaining a lot of traction in Venezuela. BTC trading volume according to LocalBitcoins is relatively high in this region. Dash has also gained a lot of ground with its instant transactions and SMS payments.
Not everyone in Venezuela has access to the internet after all. SMS payments allow people to complete transactions without a connection. Moreover, in a country where prices rise by the second and annual inflation is over 1,000,000%, time is of the essence.
For most people, waiting for a few minutes for a Bitcoin transaction to be confirmed isn’t a problem. For Venezuelans, it means the price has gone up. This is one of the reasons that Dash has become popular as a payment method here and is now accepted by thousands of merchants.
However, despite the volatility of Bitcoin, some Venezuelans are using it less as a means of payment and more as a store of value. It may be considered a risky asset to people in relatively stable economies, but when your wealth is eroded by the second, BTC offers a lifeline.
But will the first Bitcoin ATM in Venezuela have any impact? Will its long-awaited arrival change Venezuelans’ purchasing habits and improve the situation there?
The first Bitcoin ATM in Venezuela
For now at least, that looks unlikely. According to CoinATMRadar, the PandaBTM crypto ATM has not been installed in Caracas where the majority of the population lives, but has instead been installed in a small town called San Antonio del Táchira. That might seem illogical at first, but the town’s location was a large factor behind the installation of the first Bitcoin ATM in Venezuela.
The machine rests in a small convenience store on the side of the main road on the way to Colombia. Since there is a lot of traffic mainly going in one direction from Venezuelans escaping their country, it makes a lot of sense for the Bitcoin ATM in Venezuela to be located here.
The ATM will allow users to convert Bitcoin, Dash, and Bitcoin Cash into both sovereign currencies of Colombia (pesos) and Venezuela (bolivares). Considering the flow of the traffic and restricted circulation of Venezuela’s national currency, it’s more likely that the demand is for Colombian pesos.
While the location of the Bitcoin ATM makes sense for those travelling to neighbouring Colombia, it’s unlikely to help those left in Venezuela. It’s an excruciating 12-hour drive from the capital and fuel is also in short supply.
Venezuelans may buy Bitcoin and send it back to relatives living in Caracas, but they could have done that anyway once they arrived in Colombia. There’s a Bitcoin ATM in the nearby Colombian town of Cúcuta, just 20 minutes away. That’s been there since March of this year – and the situation in Venezuela is far from improving.
Colombia has the most Bitcoin ATMs in Latin America
Colombia, in fact, has the largest amount of Bitcoin ATMs in Latin America and is the ninth biggest adopter country when it comes to physical machines at 54. Multiple partnerships and government incentives in the country are pushing up Bitcoin adoption. As is the number of Venezuelans pouring into this country using Bitcoin to preserve their savings.
The first Bitcoin ATM in Venezuela is certainly a step in the right direction. The problem is, it’s servicing Venezuelans who are stepping in the wrong direction – outward. The sad truth is that more Bitcoin ATMs across the country may help BTC adoption. But the lack of necessary fiat makes it unlikely that people can access the real cash they need.