In the wake of Venezuela’s contentious July presidential elections, the nation has been plunged into turmoil. With the National Electoral Council yet to release official election results, the Nicolas Maduro administration has sought judicial backing to confirm his re-election. This has led to widespread unrest, including arbitrary detentions, internet censorship, and other forms of repression. Amidst these challenges, Venezuelans are turning to cryptocurrencies—particularly bitcoin and stablecoins—as crucial tools for resisting oppression and supporting human rights efforts.
Crypto as a Lifeline Amidst Political Turmoil
Election Uncertainty and Repression: Since the elections, clarity on results remains elusive. The Maduro administration’s response to opposition claims of victory has included widespread detentions and censorship, with access to global services like Binance restricted. VPNMentor reported a staggering 494% increase in VPN usage as Venezuelans sought to circumvent these restrictions.
Venezuela’s Crypto Landscape: Venezuela is one of the top countries for crypto adoption in Latin America, according to Chainalysis. With over 7.7 million Venezuelans living abroad, cryptocurrencies have long served as a bridge between the local economy and the international community. This trend has only intensified in the post-election climate, with peer-to-peer crypto platforms like El Dorado seeing a surge in activity.
Bitcoin and Stablecoins: Tools of Resistance
Surge in Crypto Activity: In the wake of the election and subsequent repression, Venezuelans have turned to cryptocurrencies as a means of coping with economic distortions and funding critical support. On election day and the following days, the average order size on platforms like El Dorado doubled. The USD-bolivar rate surged by approximately 15%, making cash increasingly difficult to obtain.
Bitcoin as a Last Resort: Bitcoin, while a small part of the overall crypto activity, plays a significant role in Venezuela’s resistance efforts. The Lightning Network enables fast and cost-effective transactions, crucial for those affected by the regime’s repression. Venezuelans abroad convert cash and transfers into cryptocurrencies, particularly stablecoins, which are used to fund legal defense, healthcare, and basic needs for families affected by arbitrary detentions.
Stablecoins and Decentralised Platforms: With the Maduro administration’s crackdown extending to major exchanges and services, Venezuelans have increasingly turned to decentralised exchanges and non-KYC platforms. Despite lower liquidity, these platforms provide essential services for converting cryptocurrencies into bolivars or dollars, helping users avoid surveillance and censorship. The use of Stellar, TRON, and Polygon has been particularly notable due to their low transaction fees and decentralised nature.
The Broader Implications of Crypto Use in Venezuela
Economic Impact: The surge in cryptocurrency use reflects the broader economic instability in Venezuela. As traditional financial systems falter under repression, cryptocurrencies offer a resilient alternative, providing both a means of economic stability and a tool for political resistance.
Humanitarian Efforts: Crypto funds have become a vital resource for humanitarian efforts in Venezuela. With over 2,200 reported detentions, the ability to channel funds through cryptocurrencies helps support affected families, legal aid, and other essential services. This use of crypto demonstrates its potential as a force for good in extreme political and economic conditions.
Global Crypto Adoption: Venezuela’s situation highlights the growing role of cryptocurrencies in global finance, particularly in regions experiencing political and economic instability. The adaptability and resilience of cryptocurrencies offer valuable lessons for other countries facing similar challenges.
Conclusion
The ongoing crisis in Venezuela underscores the critical role of cryptocurrencies in resisting political repression and supporting human rights. Amidst the uncertainty and turmoil, bitcoin and stablecoins have become lifelines for Venezuelans, facilitating economic stability and providing crucial support for those affected by the Maduro administration’s crackdown. As the situation continues to evolve, the resilience and ingenuity of Venezuelans using crypto offer a powerful testament to the potential of digital currencies in challenging times.
