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Latin America is one of the most active regions in terms of cryptocurrencies. Countries such as Argentina, Chile, Peru, Colombia and Venezuela are showing increasing desire and interest in this market. Only in Venezuela are around $ 20 million a month traded on P2P platforms, hence the interest this strategic area has for companies like GoCrypto that are dedicated to this technology.
Eligma has successfully installed 1,000 processing points for cryptocurrency payments to facilitate the global adoption of this technology. For this reason, GoCrypto has concluded an important alliance with the Colombian-Venezuelan company, taking into account the potential of Latin America on the world map of cryptocurrencies. Xpay, to position itself on the continent. The Colombian processor is installed at more than 200 locations in Argentina, Colombia and Venezuela.
But what about the introduction of cryptocurrencies in Latin America? Despite the important interest that exists on the continent, the reality of every country looks different, full of peculiarities of every economy. Although it seems contradictory, the strongest movement of values can be found in Venezuela and the strongest interest.
And the fact is that the economic reality of the country, which has been in hyperinflation since late 2016 and is one of the world’s poorest economies, has prompted citizens to look for new tools. First, the dollar, which was no longer prohibited by law, became an everyday currency.
It may interest you: Where to buy Bitcoin and other cryptocurrencies in Venezuela?
The bolívar, the country’s local currency, performs practically none of the functions of money (store of value, means of exchange, unit of account), and the Venezuelans have tried to solve these problems with a de facto dollarization that began and was started by Hand of the people deepened, not by the government. In this scenario, cryptocurrencies, but especially Bitcoin (BTC), were of significant relevance as their space was reduced due to the increasing presence of dollars on Venezuelan roads.
Given that the control of currency circulation in the Caribbean country was loosened, Venezuelans needed less to use Bitcoin as the vehicle currency within the country. However, as Matt Ahlborg’s research on Venezuela’s influence in the region confirms, the reality is that cryptocurrency continues to play this role across the region, which is partly fueled by the Venezuelan migrant diaspora.
As long as interest in money transfers from and to its borders in Venezuela remains, Bitcoin and other cryptocurrencies will continue to have priority.
However, there is a point where companies like Eligma can contribute while taking advantage of an interesting market opportunity. With the growing popularity of the dollar as a means of payment in Venezuela, Venezuelans have begun to face the problems of a foreign currency that has been introduced as a means of payment on their territory.
On the user side, we can list problems related to the deterioration of the tickets, the inability to turn, the exclusion of alternative means of payment such as PayPal or cell. While merchants are struggling with the custody of funds, their liquidation in Bolivar, and the difficulty in reinvesting resources in local finances, there is not enough bank liquidity for all banks in the country to begin accepting deposits and processing transfers and other movements in dollars.
All of these problems associated with the new and popular dollar boom in Venezuelan streets can be solved with cryptocurrencies, especially if you have the infrastructure to process them as a form of payment. GoCrypto has the experience, product, and partnerships needed to do this.
The challenges are enormous. In fact, the main point is against the adoption of Cryptocurrencies in Venezuela It is an internet connection that is essential for cryptocurrencies to work in all their glory. And if we add the problems of the power grid, the low level of technological penetration and the crime rate in the country, the panorama seems terrifying. However, we are talking about resilient technology.
Mining activity is known in Venezuela, so these private initiatives show that it is possible to create sufficient infrastructure to sustain this activity. Payment processing is easier and requires a simpler structure.
How can the user be encouraged to use cryptocurrencies? The boundary between payment processors and users is commissions. As long as payment with cryptocurrencies requires a surcharge for the user, they always choose the cheapest option or at least this does not imply any surcharge. The most popular payment processors in Venezuela have high commissions, making crypto payment a niche phenomenon of snobbery.
When users have to run away from their own local money, they least want to use new money, which means that they lose percentages of the value they trade, which is why the options currently on offer hinder acceptance. Without considering volatility, another important element for the general public and the possible use of cryptocurrencies.
The way to support adoption while benefiting from this openness is to create a reward system. In addition to expanding across the country, the strategy to enter this new market can be used at low prices for users who choose to use the company’s payment processor or Xpay. Not only would the solution be efficient (by implementing cryptocurrencies to address dollar payment shortcomings), it could also make it more attractive to users than before.
Given the reality of the Venezuelan market and its weight within the cryptocurrency economy in Latin America, it is clear that participating in its ecosystem could offer greater reach in the rest of the region.
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