With Venezuela gradually recovering from its recent economic crisis, more and more families are starting to rely on cryptocurrencies.
Traditionally, most funds were transferred through international banking systems or platforms such as Western Union or MoneyGram, with transaction fees as high as 7%. However, the volatility of the bolivar and the three-day transfer time have made cryptocurrencies a faster alternative.
Over the past decade, Venezuela has become one of the South American countries that heavily relies on remittances. It is estimated that nearly 30% of Venezuelan families received remittances after a large-scale migration. According to Chainalysis data, 9% of all remittances sent to Venezuela last year were in the form of cryptocurrencies.
Source: Manuel Orozco, Americas Quarterly, Chainalysis
In just the past decade alone, over 77,000 Venezuelans have escaped as immigrants or refugees, with nearly 3 million people settling in the United States just last year.
However, once settled, immigrants often help their families back home. In 2018, Venezuelans received over $540 million in remittances, accounting for about 6% of the country’s GDP, of which approximately $46 billion was achieved through the use of cryptocurrencies.
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As it is well known, over time, the number of Venezuelan immigrants sending money back home has increased by 50% to 60%, although some still cannot afford it.
Despite its advantages, using cryptocurrencies for remittances brings risks such as price volatility and regulatory uncertainty. This may also mean that popular platforms for converting cryptocurrencies into bolivars can be easily scammed, as these platforms lack regulation.
