The recent threat by the United States government to prohibit payment companies from processing transaction in Venezuela is expected to make Bitcoin flourish more in the country.
Visa, MasterCard To Shut Out Venezuela
A recent report by Bloomberg noted that President Trump’s administration is considering further economic sanctions against the Maduro’s led administration in Venezuela. According to a government official, the new sanction will be in the form of prohibiting payment firms such as Visa, MasterCard among others from operating in the country.
The planned sanction is an accentuation of measures to cut off access to funds to President Maduro and other allies in the country. This plan could affect companies in strategic sectors like aviation, agriculture, power among others.
Along with the US-based MasterCard and Visa, other international payment processors could also possibly pull out of Venezuela, because of the fear of being targeted by the U.S. government.
Bitcoin To The Rescue
If the intending sanction is implemented, it will worsen the ranging hyperinflation in the country. Meanwhile, the absence of the payment processing firms and the large underbanked or unbank populace of Venezuela will also possibly find solace in the use of Bitcoin to sort their financial needs.
As Visa and MasterCard cuts out Venezuelans from the world economy, Bitcoin will come to their salvation. This time, Bitcoin adoption should increase in a greater dimension.
Venezuelans have become fond of cryptocurrencies in recent time due to the poor economy of the country and the hyperinflation that renders the national currency, the Petro, a poor means of storing value. Between January and early March 2019, Venezuelans were reported to have traded more than $60 million worth of Bitcoins [BTC] via the Localbitcoins peer-to-peer platform.
While payment firms in the United States and other regions of the world could be influenced by the interest of the United States, Bitcoin is not bendable. The decentralized system enables transaction and movement of funds without the influence or sanction from an external body.
Bitcoin is politically neutral and borderless. This makes it out of reach of state censorship and has stimulated its adoption and use over the years.
In early January, some workers in the United States were unable to receive their pay because of the government shutdown which renders payment impossible. Within the blockchain system, this is not possible because of its unique qualities.