As Venezuela’s economic conditions deteriorate, there has been a notable increase in crypto remittances by expatriates to support their families back home.
Amid persistent inflation and supply shortages, cryptocurrencies accounted for 9% of the $5.4 billion sent to Venezuela in remittances in 2023, which amounts to $461 million.
This trend of growing remittances has been consistent each year since 2018, apart from a brief dip in 2020, as reported by Chainalysis.
Typically, remittances are processed through services like Western Union, but their high fees and the logistical challenges related to currency availability often render these options impractical for many in developing countries.
Despite possessing the world’s largest proven oil reserves, Venezuela continues to struggle with severe inflation, economic sanctions, supply disruptions, and government corruption.
In an attempt to circumvent U.S. sanctions, the Venezuelan government launched a state-backed cryptocurrency, the Petro,
in 2018. However, this initiative failed to achieve mainstream acceptance due to widespread corruption concerns and its non-recognition as legal tender domestically.
The Petro struggled for six years before being discontinued in 2024.
The government, nonetheless, remains interested in using digital assets to bypass sanctions.
Earlier in the year, there were reports of Venezuela’s plans to use cryptocurrencies in international oil transactions.
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Subsequently, Tether, a stablecoin issuer, froze Venezuelan assets in compliance with U.S. sanctions.
Additionally, Venezuela faces severe energy shortages, which have led to new restrictions.
In May 2024, Venezuelan authorities imposed bans on cryptocurrency mining, citing its excessive demand on the national power grid—a grid that has been failing for the last decade.
This anti-mining stance is not new for the Maduro government. In 2023, the closure of mining facilities was prompted by a corruption investigation involving the country’s oil industry and Joselit Ramirez Camacho, the head of its cryptocurrency ministry.
This move reflects ongoing governmental resistance to cryptocurrency operations within the nation.
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