On the peeer-to-peer exchange platform LocalBitcoins Argentina and Venezuela again showed Bitcoin (BTC) records.
According to the CoinDance website, weekly trading volumes in the local fiduciary currencies of Argentina and Venezuela through the LocalBitcoins platform have broken further records.
The data presented by CoinDance shows the week of December 21 with the commercialization on the platform of 32,613,494 Argentinean peso, equivalent to 62 BTC, compared to the week of December 14 with 21,513,195 peso (41 BTC), which shows a significant increase.
In turn, in the same week 248,020,764,800 strong bolivars, equivalent to 781 Bitcoins, were introduced to the market in Venezuela, which is a 15% increase compared to the week of December 14, when 209,368,431,499 strong bolivars, equivalent to 637 Bitcoins, were introduced.
Possible reasons for the increase
Argentine economic measures
The Argentinean increase in the volume of Bitcoin exchanges can be linked to the economic measures established by the outgoing government, which the new government also supports. On 17th December this year the Argentine government announced the adoption of a law entitled “The Law of Solidarity and Production Reactivation”.
Amongst the measures contained in the law the introduction of a 30% tax on the purchase of foreign currencies allocated to savings can be mentioned. Infoabe reports that the measures thus achieved will be covered by a special law that aims to settle the social and economic crisis in Argentina.
During the presentation of the draft law, the Argentine Economy Minister Martin Guzmán explained that the measures are “part of a comprehensive plan and continuous effort” that aims to stop the crisis in Argentina and to protect the country’s most vulnerable economic sectors.
The new government also intends to maintain Mauricio Macri’s currency exchange control on dollars, which is 200 dollars for purchases and 100 dollars for cash, until the end of December this year.
In addition the Central Bank of Argentina issued a statement on 31st October this year on the strengthening of control measures during the purchase of the cryptocurrencies with credit cards, which was however modified by the new government. According to this, control will remain in place for the next 5 years, and this has been a stimulus for the increased commercialization of Bitcoins by the citizens of Argentina.
Inflation is a serious problem in both Venezuela and Argentina, and it is these countries’ citizens who are leading them to secure their money by investing in cryptic cars, mainly bitcoins. The Venezuelan inflation (39113.80%) is incomparably higher than the Argentinean inflation (51.40%), according to data from November 2019.
Sanctions imposed on Venezuela
The Venezuelan government is blaming the United States and its sanctions for the current economic crisis. This has also had an impact since the sanctions were imposed (August 2019) on the increased exchange of Bolivar to Bitcoin and is reaching historic highs this month. Moreover, the Central Bank of Venezuela is reporting on the acquisition of Bitcoins by the state-owned oil company PDVSA and its use of Bitcoins and Ethereum. The options mentioned by the company are supply fees, although some include these purchased cryptocurrencies in the country’s reserves
What about Petro?
The Venezuelan government has also tried to solve the crisis with the introduction of its own cryptocurrency, the so-called Petro, but citizens have not shown much confidence in Petro, and although Petro is legal, they prefer to buy Bitcoins. The Venezuelan government intends to counteract this by imposing on the citizens of Petro, which is to be used for the payment of pensions and the budget sector, as well as for the construction of new houses, and thus to stimulate the housing economy.
The President of the country said in his speech that these are measures developed by the government to encourage citizens to use Petro in their daily lives and protect their savings. He also added that Venezuela is the first country to have its own crypto and that he believes in its protection of the Venezuelan people.