“Borderless Money” is more than buzzword when you live in a collapsing economy and a collapsing dictatorship
I keep all of my money in Bitcoin. Keeping it in bolívars would be financial suicide: The last time I checked, the rate of daily inflation was around 3.5 percent. That’s daily inflation; the annual inflation rate for 2018 was almost 1.7 million percent. I don’t have a bank account abroad, and with Venezuela’s currency controls, there’s no easy way for me to use a conventional foreign currency like American dollars.
Things just keep getting crazier here. Venezuela now has two presidents. One of them, Nicolás Maduro, wants to take on the British billionaire Richard Branson in a competition of charity concerts. While we Venezuelans are going hungry, there have been violent standoffs over humanitarian aid piling up at the borders with Colombia and Brazil. And before I can buy milk, I need to convert Bitcoins into bolívars.
Actually, that part is easier than you might think. I go through the listings on LocalBitcoins.com, the exchange that most Venezuelans seem to use, looking for offers to buy my Bitcoins from people who use the same bank I do; that way the wire transfer can go through immediately. Once I accept the offer, the Bitcoins get deducted from my wallet and are held in escrow by the site. I send my banking information to the buyer and wait.
After the buyer sends me the bolívars via wire transfer, I release the Bitcoins from escrow and they are transferred to the buyer’s Bitcoin wallet. We give each other a positive score, and that’s it. The whole process takes about 10 minutes.
Turns out, I’m not the only Venezuelan using cryptocurrencies. The local market for Bitcoins broke a record on April 17, reaching $1 million worth on that day alone, Bloomberg reported. Venezuela has been ranking second worldwide in volume of activity on LocalBitcoins.com, after Russia. According to Coin Dance, a website that monitors cryptocurrency transactions, during the week ending on Feb. 16, people in Venezuela traded about $6.9 million on LocalBitcoins.com, compared with about $13.8 million in Russia. (I’m converting at the average Bitcoin exchange rate CoinMarketCap applied that week.) That’s saying something for a country in its fifth year of a recession, whose economy contracted by some 18 percent in 2018.
I can’t change too many Bitcoins at once, though. The government doesn’t monitor cryptocurrency transactions (yet), but it does monitor transactions in bolívars — and any worth about $50 or more will automatically freeze your account until you can explain to your bank where the funds come from.
Still, you could say that cryptocurrencies have saved our family. I now cover our household’s expenses on my own. My father is a government employee — in a printing department with no paper — and earns about $6 a month. My mother is a stay-at-home mom with no income. And cryptocurrencies helped my brother Juan, 28, escape Venezuela last summer.
For years, he tried to make it as a lawyer here, but in times of hyperinflation, everyone is constantly getting poorer, including a lawyer’s clients. Juan was earning so little that he was actually spending money to work (buying stationery, taxi fare). Eventually he gave up.
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A version of this article appears in print on Feb. 24, 2019, on Page SR9 of the New York edition with the headline.