Could Cryptocurrency Be the Solution to Venezuela’s Problems?
In a country with the largest oil reserves in the world, its people are unable to buy food. The national currency, the Bolivar, devalued by 95 percent this week wiping out people’s savings. And millions of Venezuelans have fled their country overwhelming the borders with Colombia and Brazil. There are even stories of Venezuelans who have walked to Argentina – a journey of thousands of miles.
Amidst such a distressing panorama, Eugenia Alcalá Sucre, founder of Dash Caracas and Dash Venezuela tells CoinCentral what it’s really like living in Venezuela on a day-to-day basis. And why she believes that cryptocurrency–specifically, Dash–can provide a solution to the growing humanitarian crisis.
“Like many Venezuelans,” she says, “my husband and I left in 2015.” Thanks to rising food shortages, inflation, crime, a crumbling economy and political uncertainty, “we felt that our country didn’t have opportunities for us anymore.” They moved to Buenos Aires, Argentina, risking everything to go there and leaving all that they owned behind. Yet due to illness, she was forced to return to her country.
A Country in Ruins
“When I came back, I had a different perspective, like moving to another country is not always the only solution,” she says. “But when I returned [in 2016] I was really shocked by the deterioration. My country was devastated. We started to see things like entire families eating out of the garbage on the street and people not being able to buy food or their basic necessities, even though they were professionals with jobs.”
She continues, “In 2017, we had a difficult time in Venezuela, with many uprisings and protests.” Massive anti-government demonstrations, widespread violence, and a death toll in the hundreds unfolded after several months of unrest. Eugenia says that’s when she “realized that it was not only an economic crisis anymore but a social crisis as well.”
Beyond the demonstrations and the political oppression, we’re not just talking about homeless people without jobs who can’t afford to buy food. Eugenia explains that there are multiple barriers preventing everyday people from accessing their money. Not only is there rampant hyperinflation the likes of which has rarely been seen in modern times, but on top of that, Venezuelans have no way of shielding their wealth from devaluation as they are forbidden from purchasing foreign currency freely.
“We’ve had exchange controls for many years now,” she says, “we cannot freely buy dollars with bolivars. We need a special permission from the government and that has become harder and harder to obtain, which drives people to other measures.”
The Black Market
A black market for buying dollars and other foreign currency has existed in Venezuela for many years but has become especially necessary since high inflation became hyperinflation. “We buy tomatoes today for one price and tomorrow it might be the double of that price,” Eugenia explains, “We don’t know how much it’s going up but we do know it’s going up. Our income is buying less and less every day.”
So regular people, even working professionals, simply cannot put food on their tables. “When you see all these barriers,” she says, “sometimes people have turned to the black market, but that is dangerous because it is illegal. There have been cases of people put in jail for using the black market.”
A Lack of Cash
“If that wasn’t enough,” Eugenia adds, “we also have the problem of a lack of cash. That is a serious problem as there are a lot of services we can’t pay for in any other way than cash, such as public transportation.”
This sounds unbelievable but it’s actually true. Many working professional Venezuelans are sleeping on the streets because they can’t access the cash they need to take the bus home. Even though they have it in their bank.
“There are a lot of people living on the streets even though they have a job. But they don’t have enough cash to go to work and go home every day. They work from Monday to Friday and go home on the weekends. Bills are really, really scarce. You go to the bank and they only give you a little amount. They have limits. Even though you have the money in the bank you can’t take it out.”
Limits on Debit Card Spend
“On top of that,” she adds, “there is another problem. The debit card and wire transfers are also limited, so with hyperinflation prices go up and up but my debit card only allows me to spend so much in a day. Even though I have the money in my bank, I cannot spend it.”
Many of the members of the Dash Venezuela team share similar stories of being unable to keep their heads above water. “There is one woman,” Eugenia says, “who was a General Manager of a bank. Although she had all those years working there and the highest rank in that office, she could not afford to feed her two kids.”
Cryptocurrency as a Legal Alternative
When people are dying, children are starving, crime rates are skyrocketing, and the borders with neighboring countries overcome, you have to have a pretty iron-cast will to remain. But Eugenia was resolved to help her country find a way of overcoming these problems. She says:
“So, we started thinking of overcoming economic barriers without breaking the law. Cryptocurrencies are not a crime in Venezuela. I had heard about Bitcoin a few years ago but I didn’t pay attention to it; I thought it was a university project or something.” But in 2017, when the situation looked particularly dire, she started to research more deeply. That’s when she came across Dash.
“I fell in love with Dash not only because of the characteristics of the currency that makes it easier to use but because of the DAO. That blew my mind. I started investigating Dash and thinking about how I could make a difference that would help Venezuelans to know about this.”
Eugenia is not a programmer, developer, economist, or engineer. She’s a psychologist, who’s worked for many years in training with teenagers, adults, children, in companies, and with entrepreneurs. In fact, it was her experiences working closely with entrepreneurs that helped her idea of Dash Conferences in Venezuela to gain momentum.
Spreading the Word About Dash
Against such an overwhelmingly dismal backdrop, how could Dash even begin solving the problem? “So,” she explains, “Dash helps with hyperinflation since people can use it to shield their wealth. It helps with the cash problem, and it helps also with the velocity of the transaction as Dash is so quick.”
Transaction speeds are important to many people around the world but even more pressing in Venezuela with a currency devaluing by the second.
“More importantly,” she says, “Dash can help as a means of everyday payment. And the governance system of Dash has made it possible for us to hold conferences and speaking engagements for Venezuelans about cryptocurrencies and Dash. The goal is to educate people about how to use it as a solution to the problem.
We have over 5,000 people coming to conferences and we do a conference every month. After the conference is done we have this activity called Dash City which is an entrepreneur fair where products and services are bought only with Dash. This is a practical way of seeing Dash work and it’s fundamental because we can talk about cryptocurrency in theory but until you see it working really, download your own wallet and buy something with Dash, that’s what makes people realize it’s really possible.”
But how practical is Dash today? Are there stores in Venezuela that actually accept it as a form of payment? How to everyday people get access to Dash if their currency is worthless?
“We have over 900 merchants today that accept Dash in Venezuela,” she says. “That is an achievement of a conjoint effort of Dash Venezuela and entrepreneurs in over 20 communities and projects in Venezuela that are also raising awareness and working to explain to merchants what is Dash and how to use it.”
Dash Conferences in Venezuela
The Dash Conferences are aimed at entrepreneurs as “their personality traits are good for spreading this information as they are bolder and prone to taking risks. They’re more likely to experiment, as they have the liberty of doing it compared to a big company that has to overcome a lot of processes and policies. Entrepreneurs just have to make their choice and just do it. They have been a part of our success.”
In fact, Eugenia says that many small entrepreneurs have even been an inspiration to bigger businesses. “They think, “if this little entrepreneur can do it then why can’t we?” They not only talk about it but are leading the example.”
Eugenia and her team have already held 10 conferences so far this year and will close with the 12th next month. After that, she has plans for other kinds of activities that are more targeted to merchants, such as training events, to help more and more entrepreneurs to use Dash. Although, they will still hold conferences, “maybe three or four times a year,” she says.
Do Most Venezuelans Know About Cryptocurrency?
Your average European or American probably isn’t familiar with blockchain. Those that are familiar often have mixed definitions and a lack of complete understanding. But that isn’t the case in Venezuela. “The best-known cryptocurrencies in Venezuela are Bitcoin, Petro, and Dash,” says Eugenia.
And what does she think of Petro? She hesitates, displaying a certain reluctance to speak freely about government initiatives. “Petro is an interesting project,” she says, “The most important of all, though, is that the government has incorporated the word cryptocurrencies in their speeches.” This has served to help Eugenia and her team spread the word about Dash more easily and educate the wider Venezuelan public.
“When we start to speak about Dash, people have already heard of cryptocurrencies,” she says, “so, Petro has been a step forward in helping people know there is something called blockchain and there is something called cryptocurrencies.”
Increasing Acceptance of Dash
“We now have merchants being able to buy materials from China and pay in Dash and sell their products in other countries and accept Dash. Venezuelans have been using cryptocurrency for years now to protect their capital from inflation, but now with Dash, it has opened a new window as a means of payment. It is an easy way to receive something that is stronger than the Bolivar and is within the law.”
So what types of merchants accept Dash? “We have a huge variety, from little ones like coffee and ice cream sellers to grocery stores, and a company that makes and sells motorcycles… There are also health centers that are accepting Dash, schools, universities, and clothing stores… there are a whole lot of options.”
Is Eugenia concerned at all that if Dash gets too strong and becomes a threat to the government they may make it illegal?
”I hope not,” she says, “I think it’s possible because of the characteristics of the government that is in Venezuela right now, but there are people in the government that understand cryptocurrency and know this is a tool they have to use. I believe that they are not going to stop it because it serves them as well.”
And what about the conferences she holds that amass thousands of attendees? “We have to be alert, but they haven’t taken any action to stop the events, we have to be on guard, but I hope that it is going to be okay.” After all, she stresses, the conferences are about teaching entrepreneurs about Dash–not an anti-government movement.
How About Being Non-Technical and a Female?
“Actually, my not having a technical background, I think has helped people relate to me and to understand cryptocurrency when they don’t have technical or development background. There is a phrase I use a lot in my conferences. I do not understand blockchain in a technical point of view and I do not understand the economy from an economic point of view, but I am a person and I earn money and I understand that this kind of money has a value.”
She says that this relatability helps people to relax when they realize that they don’t need a developer background to understand it. And as for being a woman? Eugenia doesn’t consider herself a feminist–she just does her job. “People are listening not because its a female or a male voice, they are listening because it is useful for them.”
She says that the only time she saw being a woman as a problem was with “one particular journalist in Venezuela, a specialist in technology. He’s never wanted to have me in his interviews although he has had my male colleagues. Maybe if I was a man this guy would like to talk to me.”
And the Biggest Challenges That Lie Ahead?
“We have built a momentum with the conferences. I think we have to embrace that momentum, we cannot let go, we need to keep going. Also, we have to work on the next projects for how people can get Dash and other cryptocurrencies directly so that they don’t have to use the Bolivar. We need to develop different ways for Venezuelans to receive Dash.”
Many Venezuelans who work online are accepting payment in crypto and can work with people all over the world, using it freely to pay for goods and services. This needs to be extended to other types of workers. And there’s still a long way to go before Venezuelan public transport will accept payment in Dash. But we’re at the tip of the iceberg after all.
“It’s not like this is the solution to every problem,” Eugenia says, “but there is some sort of hope that spreads with the using of Dash.”
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ABOUT THE AUTHOR
ABOUT THE AUTHOR
Christina is a B2B writer and MBA, specializing in fintech, cybersecurity, blockchain, and other geeky areas. When she’s not at her computer, you’ll find her surfing, traveling, or relaxing with a glass of wine.