Banking Shut Down In Venezuela Boost Cryptocurrency Adoption Suddenly

Amidst the Coronavirus outbreak all across the globe, the government of Venezuela led by President Nicolas Maduro has shut down all banking institutions as part of the quarantine period.

Venezuela, which has been going through a massive economic crisis over the last few years, is facing another major resistance to its banking system. Well, this measure from the Venezuelan government has forced people to move to the peer-to-peer Bitcoin purchases.

The Bitcoin trading activity in Venezuela has suddenly shot up after the announcement on Tuesday, March 17. On this day, President Nicolas Maduro announced a country-wide quarantine to fight the spread of the Coronavirus.

Venezuela has so far reported 33 cases, however, its government said that the administration wishes to take some pro-active measures to prevent its health-systems from getting overwhelmed with the rapid increase in infections.

As part of this sudden quarantine measures, Venezuela’s national banking system has been halted for an “indefinite” period of time. The trading activity at LocalBitcoins, between BTC and Venezuela’s national currency Bolivar, has suddenly shot back above $3.4 million for the last two weeks.

The economic setbacks by the Coronavirus has forced people in the South American continent to move towards cryptocurrencies. Other South American countries like Peru and Colombia have also seen an increase of 30% and 15% respectively over the last week, Both Peru and Colombia have closed its borders in the recent day.

The effect of COVID-19 spread has also forced the Venezuelan government to dampen its efforts of forcing the adoption of its national cryptocurrency Petro. The Maduro government launched Petro in early 2018 as an oil-backed national cryptocurrency.

Petro was launched as a move to dampen the effect of the U.S. economic sanctions faced by Venezuela. However, several locals have rejected this national cryptocurrency as it is ultimately controlled by the Venezuelan state government.

The Maduro government has flexed its muscles enough to force the adoption of Petro. Last year, the government made it mandatory for all flights flying in and out of Venezuela to pay for the fuel refinement in Petro.

However, data shows that local have been offloading the cryptocurrency. As per the LocalBitcoin listings, Venezuelans are offloading their tokens at half the fixed value of $60.