October 2018 has seen record Bitcoin trading volumes on peer-to-peer platform LocalBitcoins in Argentina and Venezuela.
Given the economic crisis in both of these South American countries, BTC has fast become a financial refuge for many nationals, with the governments of both Mauricio Macri and Nicolás Maduro struggling to save their economies from going under from highly unsustainable inflationary situations.
Such is Bitcoin’s current impact on both of these nations at present, blockchain voting project Democracy Earth developer Santiago Siri, has suggested that the Argentinian Central Bank should place up to one percent of its national reserves in Bitcoin. BTC has become a veritable safe haven with ATMs now becoming widespread to cater for demand, and significantly more merchants across the country accepting Bitcoin as payment
Argentina, which is now on the IMF help list of struggling economies needing financial aid, has seen LocalBitcoins recently post a record trading volume of almost $9 million BTC on its platform as the peso continues its nosedive against the US dollar. Since April, the number of bitcoins transacted using LocalBitcoins increased from 13 to 33, 153% in just a few months.
The inflation rate in Venezuela under Maduro is almost impossible to keep up with, such is its persistent decline. The Petro, brought in as a panacea to trade embargoes and sanctions and a plummeting bolivar, is still heralded by Maduro’s government, but referred to by many others as simply non-existent, despite shop fronts sporting “we accept Petro” signs.
The IMF is now predicting an inflation rate of 10 million percent by 2019, which would put the country in the same league as Germany in 1923 before the rise of Nation Socialism and Hitler’s rise to power in the 1930s. Germans at this time shopped with wheelbarrows filled with Deutschmarks. Maduro’s citizens have been making their own shopping bags out of bolivars in order to transport larger denominations of the same currency.
In this climate, Bitcoin has become the only safe currency, albeit secured largely underground with overseas dollars, and has seen accelerated activity in past weeks due to the government’s switch from the Bolivar Fuerte (VEF) to the Sovereign Bolivar (VES). P2P trading on LocalBitcoins has skyrocketed as a result, with total BTC trading volume for October 2018 standing at almost 900 million bolivars (approximately $14.4 million).
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