Cryptocurrency remittances to Venezuela exceeded USD $450 million in 2023: report

By Hannah Perez

Venezuelan families abroad appear to be increasingly turning to cryptocurrencies —especially to digital dollars like USDT— to send money to Venezuela.

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Cryptocurrencies emerge as an alternative to send remittances to Venezuela
They allow Venezuelans to avoid high fees and other limitations when sending money to the country
According to data collected by Bloomberg, cryptocurrencies accounted for 9% of total remittances in 2023
Many are turning to stablecoins like USDT and sending them through platforms like Binance

Cryptocurrency remittances are on the rise in Venezuela amid a mass exodus of Venezuelans abroad and as families look for new alternatives to send money across borders.

The use of digital assets such as Bitcoin for remittances in Venezuela has emerged in recent years, Reaching a record of more than USD $461 million in cryptocurrency transfers by 2023the news agency reported on Friday Bloomberg citing data from the analytics firm Blockchain, Chainalysis.

Venezuela has become a remittance-dependent nation in recent years, with around 30% of households receiving money from abroad. More than 7 million people have fled the country in the past decade, making remittances a key element for Venezuelans to help relatives who remain.

Last year, Venezuelans received more than $5.4 billion in remittances, constituting at least 6% of gross domestic product, according to the Inter-American Dialogue, the publication reported. That is almost 75% higher than the amount sent in 2021.

“The number of Venezuelan migrants sending remittances has increased by 50-60%“, commented Manuel Orozco, director of the Migration, Remittances and Development program at the Inter-American Dialogue.It is not a higher percentage because the rest of the migrants still cannot afford to send money.”.

The data collected by Bloomberg The report suggests that the vast majority of Venezuelans abroad use unregulated or unlicensed services to send money to their home country, with a smaller proportion using licensed banks and agents. As for cryptocurrencies, while they are a growing alternative, they remain the least used channel, according to the report.

The more than USD $450 million in cryptocurrency remittances would represent 9% of all money sent home last yearan unprecedented figure to date, the report adds.

Growing use of cryptocurrencies in Venezuela

Far from using volatile digital currencies such as BitcoinVenezuelans abroad would respond to the calls stablecoins to ensure that the money reaches their loved ones in Venezuela without fluctuations in value. They would also take advantage of this type of asset to avoid the high costs and fees usually associated with remittances.

For example, traditional financial channels such as Western Union either MoneyGram They often involve a transaction fee of up to 7%, the publication noted. On the other hand, the shortage of foreign currency within the Caribbean nation can also be another challenge for people hoping to receive cash dollars in the country.

Using cryptocurrencies can help to overcome some of these challenges. For example, relatives abroad can turn to platforms like Binance to send Tether (USDT), pegged to the US dollar, to their loved ones in Venezuela, who can then choose to exchange those funds for bolivars through the peer-to-peer (P2P) exchange service or use them directly at some of the merchants that accept this form of payment in the country.

The number of stores, services and businesses that accept cryptocurrency payments —and especially USDT— in Venezuela has grown in line with the adoption of such assets in the country. According to a report by Chainalysis As of 2023, Venezuela is the fifth country in Latin America with the highest adoption of cryptocurrencies, with the use of stablecoins and Bitcoin.

In this context, new platforms have also appeared that make it easier for Venezuelans to exchange USDT or other cryptocurrencies for bolivars. For example, the platform Crixtowhich claims to be authorized by local regulators, allows USDT to be exchanged for mobile payment, a channel widely used in the country for payments in local currency.

In the nearly six months that it has been operating, Crixto has already gathered more than 15,000 users, including individuals and legal entities, the vast majority located in Venezuela, the team of that company revealed in an email to Bitcoin Diary. In line with what other reports have revealed, the most used cryptocurrency on that platform is USDT, the team added.

Article by Hannah Estefanía Pérez / Bitcoin Diary

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