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Venezuela continues to turn to Bitcoin and other digital currencies because of hyperinflation of the national currency.
Decentralized Bitcoin exchange LocalBitcoins has announced a fourfold increase in its Bitcoin trading volume since June in Venezuela. This substantial increase reflects the phenomenal rise in demand for the digital currency in the country and in other emerging markets.
According to the company, its trading volume of Bitcoin in the last three months has increased to 40 bln Venezuelan bolivars from about nine billion bolivars. This increase occurred despite the lack of clear cryptocurrency regulations and policies in the country.
Venezuela’s financial and banking systems have continuously suffered from hyperinflation and the rapid devaluation of the country’s national currency over the last year.
Based on local media reports, a huge number of university graduates, young entrepreneurs and other professionals have turned to virtual currency mining in order to generate sufficient income to fund their day-to-day activities and feed their families. Aside from Bitcoin, the other cryptocurrencies mined include Dash, Zcash and Ethereum.
The Venezuelan authorities, however, have launched a crackdown against digital currency mining. In a report by Jim Epstein of Reason.com, the police have arrested four Bitcoin miners. The report cited the statement issued by federal police agency Cuerpo de Investigaciones Científicas Penales y Criminalisticas (CICPC) director Douglas Rico regarding the arrest.
Part of the report reads:
“In a statement attached to his Instagram post, Rico said that they were running ‘more than 300′ Bitcoin mining computers and selling them in Cúcuta, a Colombian town near the Venezuelan border, which is known as a place where Venezuelans go to freely trade bolivars and dollars without abiding by the government’s strict currency controls. Rico also claimed that the miners’ actions had affected “the consumption and the stability” of electricity service in Charallave. These four individuals aren’t the first Venezuelans Bitcoin miners to be arrested.”
However, despite the arrests, digital currency mining is still flourishing in Venezuela.
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