Venezuelan government tacitly approves Bitcoin development

Venezuela's economy is going through a very difficult period. The country's inflation rate reached 275% in 2015, and the beginning of 2016 is showing an even worse situation.

The country faces serious social and economic problems, such as high inflation (the highest in the world), shortages of basic goods in the market, high crime rates, and media censorship. With the rapid devaluation of the bolivar, Venezuelan citizens are turning to other currencies.

In this regard, Cointelegraph interviewed Randy Brito, the founder of Venezuelan Bitcoin information website BitcoinVenezuela.com.

No resistance

Randy believes that there are many reasons why Bitcoin can be the savior of the Venezuelan economy.

The Venezuelan government, like several other governments around the world, has not shown any intention to accept or ban the use of Bitcoin, a fact Randy acknowledged, adding that the Venezuelan government’s stance is actually tacit. He believes that the government will censor negative statements about Bitcoin because many people in the government use Bitcoin. For example, Guido Ochoa (JNR), the son of a member of the Venezuelan Congress, bought the Bitcoin mining company Hashfast after it declared bankruptcy in the United States.

Another thing that could make the Venezuelan government tolerate Bitcoin is that most Venezuelan government officials prefer to conceal their wealth, and the semi-anonymous nature of Bitcoin is attractive to them.

Bitcoin as a viable alternative payment method

Randy said he hopes Bitcoin will replace the need for foreign currencies, such as the U.S. dollar, as people seek safe havens for their wealth as the Venezuelan bolivar loses value. Randy said:

“People need to know that Bitcoin can be a better and more flexible way to store wealth. The problem with Bitcoin is that it is not very liquid and transactions are generally irreversible. Despite this, Bitcoin is informally accepted in Venezuela, just like merchants receive credit cards in US dollars, and Bitcoin can be accepted even for international purposes.”

Randy also pointed out that most of the current Bitcoin users in the country only use Bitcoin as a means of transferring assets.

Lack of exchanges, but it did not affect development

Nonetheless, Randy also mentioned that there is a severe lack of Bitcoin exchanges in Venezuela, with only one currently in existence called Surbitcoin, which could be due to the country’s outdated banking infrastructure.

However, the lack of exchanges has not prevented the rapid growth of Bitcoin in the country. Randy said:

“The Bitcoin market is really big in Venezuela and is growing very fast. The lack of exchanges seems to be overlooked because most Bitcoin miners in the country usually trade with people they trust, mostly for privacy reasons, as they don’t want to reveal their wealth to the public.”

Bitcoin will empower people

Randy insists that Bitcoin intervention could save Venezuela’s economy.

He said:

“If Bitcoin is used not just for money laundering but for everyday transactions of goods and services, governments will lose their power over their people and will not be able to create inflation, which is a way to steal wealth from their people. If basic items such as food, medicine, clothing and other regular services can be purchased or paid for with Bitcoin, this will strengthen the cryptocurrency.”

In addition, Randy also mentioned that mining is profitable in Venezuela because the country's electricity is very cheap (or even free). With a few thousand dollars of income, people can buy at least one mining machine and mine, trade or choose to save the produced Bitcoin.

Original article: http://cointelegraph.com/news/venezuela-economy-bitcoin
By Iyke Aru
Translator: Overnight porridge

Source: Babbitt Information (http://www.8btc.com/venezuela-economy-bitcoin)