Fun

Venezuelan Migrants Are Using Bitcoin for Remittances, But There’s a Catch

News Feed - 2019-10-17 06:10:13

In 2018, Deimer González packed his college diploma, clothes and a mobile wallet with 1.5 BTC in savings and left Venezuela. What unfolded throughout 2019 offers a microcosm for Venezuelan bitcoin users around the world.


As a mechanical engineer from Caracas, formerly employed by Venezuela’s state-owned oil and natural gas company (PDVSA), González told CoinDesk that those very same savings allowed him to support his parents as he started to build a new life in Buenos Aires, Argentina.


“I was always able to send money back thanks to my savings, sparing my wages in pesos,” he said.


With an estimated $3.7 billion in remittances sent in 2019, money from abroad is an increasingly large source of income for Venezuelan families. As such, bitcoin and cryptocurrencies have assumed a larger role in facilitating cross-border transactions.


Additionally, migrants are using crypto during the relocation process itself, since it’s often hard for jobless immigrants to access financial services in their new countries.


Such is the case with Wolfang Barrios, a trader from Caracas who told CoinDesk about his experience arriving in Chile without savings in the local currency. Said Barrios: “I didn’t have a stable job, enough money or a bank account. I could send the remittances only using crypto.”


Plus, supporting a family in Venezuela isn’t easy, even with dollars. In May, Venezuelan economist Luis Oliveros placed the cost of living in the country as high as $900 a month for a family of five, with a basic food basket costing roughly $300 a month. For context, the minimum wage in Venezuela is currently equivalent to $15 a month, though economists suspect this rate won’t last long.


In González’s case, neither his prior $5 monthly wage as a PDVSA worker nor his bitcoin remittances alone offer enough to support his family.


“Now I send $50 [worth of bitcoin] and it’s still nothing,” he said, adding that both his parents currently must work to sustain themselves, without further plans to move out of Venezuela. The remittance business


Perhaps because of all these challenges, crypto-remittance businesses could start to bloom in Venezuela.


One such entrepreneur, who asked to be identified only by his first name Jesús, works for the Peru-Venezuela remittance platform Local Remesas.


“We receive between $200,000 and $300,000 a month,” he said, explaining how the platform currently trades pesos for bitcoin, to be later exchanged for bolivares in Venezuela.


As it turns out, niche fiat-to-crypto payment processing is a lucrative business in Venezuela.


According to Peru’s Migrations and Immigrations Police, the country is the second choice for Venezuelan immigrants, with over 865,000 arrivals to date. Even Nicolás Maduro’s government recently launched its own remittances platform, which uses the blockchain-based Petro (PTR).


As for Jesús, he said the trick to exchanging at the best rate is to use direct contacts: “LocalBitcoins is about 3 percent more expensive than using my own contacts.” Here’s the catch


However, for many of these bitcoin users, crypto payments are merely a last resort.


A daily inflation rate of 3 percent and the constant devaluation of the bolivar has made the exchange of bitcoin very useful for those living in Venezuela. But elsewhere in Latin America, some bitcoin users prefer to use fiat as soon as the situation is tenable.


Mariluna De La Concha, a Venezuelan crypto advocate living in México, told CoinDesk that she sent remittances in crypto to her family from 2016 until early 2019. Now she only sends pesos to her mother.


“It’s not convenient to exchange crypto,” she said. “In Venezuela it has good value due to inflation, but it’s very expensive for me from here.”


Her choice to use those expensive-but-compliant exchange platforms was also a matter of safety. Cases of fraud have been reported anonymously in Venezuelan private chats, where American bank accounts of Venezuelan users get reported and blocked after a transaction.


An anonymous source told CoinDesk there’s even the suspicion that exchange platforms’ transactions are being tracked by government police to extort bitcoin users.


For González, the mechanical engineer who fled in 2018, the situation has prompted him to switch to sending more fiat currency back home. Said González: “I’m more of a [bitcoin] holder now.”


Venezuelan Bolivar  image via Shutterstock

News Feed

Stablecoin Economy Continues to Balloon as USDC’s Market Cap Crosses $50 Billion
Stablecoin Economy Continues to Balloon as USDC"s Market Cap Crosses $50 Billion As the entire lot of 12,333 digital currencies hovers just above $1.8 trillion in value, the stable
Player Hits $250,000 (29 BTC) Slots Jackpot Staying at Home
Player Hits $250,000 (29 BTC) Slots Jackpot Staying at HomeStaying at home can pay off, not only for one’s health but also for one’s Bitcoin stash. This statement has ne
PayPal opens PYUSD stablecoin to USD conversions for cross-border transfers
Zhiyuan Sun8 hours agoPayPal opens PYUSD stablecoin to USD conversions for cross-border transfersThe cross-border payments will be handled via PayPal’s Xoom subsidiary.1248 Total views4 Total sharesListen to article 0:
TRX’s USD Exchange Rate Jumps 270% Higher on FTX After Exchange Brokers Deal With Tron
TRX"s USD Exchange Rate Jumps 270% Higher on FTX After Exchange Brokers Deal With Tron On Thursday, at approximately 12:48 p.m. (ET), the embattled exchange FTX revealed that it ha
Tristan Greene7 hours agoGoogle will allow ads for NFT games starting Sept. 15The new updates to the cryptocurrency ads policy allow for NFT gaming ads, provided the games and ads don’t promote gambling.1731 Total view
Solana Price Prediction: Analyst Projects Colossal 400% Uptrend This Cycle, Reveals Ultimate Target
Este artículo también está disponible en español. After a brief retracement, the Solana price has found support at the $163 mark and is currently trading at approximately
China’s Inner Mongolia Plans to Shut Down Bitcoin Mining Operations by April This Year
China"s Inner Mongolia Plans to Shut Down Bitcoin Mining Operations by April This Year Inner Mongolia, an autonomous region in northern China, is planning to shu
Savannah Fortis10 hours agoOver half of musicians concerned over audience perception of AI use: SurveyOver half of musicians surveyed said they’re concerned with how their audience might perceive music created using AI
French Authorities Raid 5 Major Banks Over Accusations of Money Laundering and Fiscal Fraud
French Authorities Raid 5 Major Banks Over Accusations of Money Laundering and Fiscal Fraud On Tuesday, French officials conducted raids on five major banks located in and around P
A Deeper Look Into The Pirate Bay’s Mysterious ‘Piratetoken’ Soft Launch
A Deeper Look Into The Pirate Bay"s Mysterious "Piratetoken" Soft Launch In mid-May, the popular and perhaps the largest torrent tracker on the internet, The Pir
Joe Hall9 hours agoHeating a home with a Bitcoin miner: Staying warm with satsThe heat generated from Bitcoin mining could make mining at home more accessible, affordable and environmentally friendly.5446 Total views3 To
US Treasury Secretary and Indian Finance Minister Discuss Crypto Regulation
US Treasury Secretary and Indian Finance Minister Discuss Crypto Regulation U.S. Treasury Secretary Janet Yellen and Indian Finance Minister Nirmala Sitharaman discussed crypto reg