Reuters reports that Venezuelans looking to bypass dysfunctional economic controls are turning to the Bitcoin virtual currency to obtain dollars, make Internet purchases – and launch a little subversion.
Acquiring US dollars in Venezuela means either requesting it from the state, which struggles to satisfy demand, or tapping a shadowy black market. Even small dollar transactions are out of the question for most Venezuelans. That has created a gray market for Bitcoin, a digital currency which is not governed by a central bank or controlled by a single source. In Venezuela, using Bitcoin can carry a scent of subversion.
“I’m teaching people to use bitcoin to bypass the exchange controls,” says Professor Gerardo Mogollon of Tachira’s graduate business school. A Bitcoin miner in Caracas, who prefers not to be identified, says, “In Venezuela, we have a gold fever: a bitcoin fever!”
SurBitcoin is an online platform that allows Venezuelans to buy and sell bitcoins instantaneously with the nation’s heavily inflated fiat currency, the Bolivar. US-based brothers Kevin and Víctor Charles launched Surbitcoin with the help of Rodrigo Souza, the Brazilian head of BlinkTrade.
The founders estimate that 70% of Venezuelans are unbanked and believe that Bitcoin could considerably help improve living conditions. At the same time, they believe that the cryptocurrency’s future in Venezuela depends on how carefully they conduct their business.
The launch of SurBitcoin was announced in August at an event organized by Impact Hub Caracas.
“Even though bitcoin is volatile, it’s still safer than the national currency,” said Kevin Charles. He also said:
“We are very excited to move forward with this project. Bitcoin has potential to grow in Venezuela. We have to be extremely transparent and thorough in checking users who open an account with us. We will take money-laundering regulations into account, so that drug traffickers cannot use our platform.”
Images from SurCoin and Shutterstock.