Sanction-Hit Venezuela’s First Crypto ATM Raises Fears for Bitcoin

Journalist:
Yashu Gola @whoisyashu
October 10, 2019

Venezuela’s largest department store chain Traki has installed a Bitcoin ATM on one of its premises.

The joint effort led by Traki’s blockchain wing CriptoTraki and a local cryptocurrency exchange Twenty is enabling Venezuelans to purchase bitcoin via the US dollar. Local news source Union Radio reported that Traki is running a “one-way” pilot test, wherein people would be able to buy bitcoin but not sell them. Traki clarified that it would introduce a bitcoin-selling option in the second phase. The move would allow users to exchange the cryptocurrency for the US dollar, as well as the Euro.

The Political Mishap

The Bitcoin ATM installation occurred almost a week after controversial Venezuelan president Nicolas Maduro projected cryptocurrencies as a tool to bypass the US sanctions on his regime. The authoritarian leader said they have “new instruments” that would allow people to conduct international transactions via their central bank. He added that their new payment systems are already compatible with that of China and Russia, a statement that attracted flacks from acting-President Juan Guaidó.

“The regime’s use of cryptocurrency shows desperation,” said Mr. Guaidó. “To resort to that kind of subterfuge emphasizes the economic crisis the regime is going through.”

Mr. Guaidó is a staunch supporter of the sanctions that the White House has imposed against the Maduro regime. In return, he has been recognized as the rightful Venezuelan president by more than 60 governments across the world, including the US and member nations of the Europe Union.

But for Maiker Gómez, the CEO of CriptoTraki, their Bitcoin ATM is an apolitical move, whose sole focus is to provide Venezuelans with an option to protect their savings.

“It is a gigantic step because it is a much faster process to acquire cryptocurrencies here in Venezuela,” Mr. Gómez explained. “Bitcoin can be a safeguard against the devaluation of the Venezuelan currency Bolivar. Users can also use it as a form of payment.”

CryptoTraki would also launch “point-of-sale cards,” confirmed Mr. Gómez.

Bad for Bitcoin

Famous bitcoin bull Anthony Pompliano projected the entire Venezuela-bitcoin scenario as a bullish testament for the cryptocurrency. The Morgan Creek Digital Assets founder last week said that other central banks would eventually start experimenting with bitcoin.

Nevertheless, the theory did not sit well with other cryptocurrency enthusiasts. Noted market analyst Alex Krüger feared that the involvement of Venezuela in the bitcoin space could have an adverse impact.

He referred to the anti-crypto statements of the White House officials, including Treasury Secretary Steven Mnuchin who called bitcoin “a national security issue,” stating:

“Bitcoiners are celebrating the central bank of the 9th most corrupt country in the world considering holding bitcoin … as Petroleos de Venezuela somehow owns some bitcoin and is desperate to use it to skirt US sanctions. Common sense indicates this is not at all bullish.”

This article was edited by Samburaj Das.

Tags: Bitcoin
Yashu Gola @whoisyashu

New Delhi-based Yashu Gola has been working as a cryptocurrency analyst/journalist since 2013. He is an information technology graduate, a cryptography junkie, a filmmaking enthusiast, and an avid reader of Jon Erickson, Agatha Christie, JK Rowling, and Isaac Asimov.