Bitcoin Trading Soars in Venezuela As Banks Shut Down Due to Coronavirus

As the coronavirus outbreak is hitting the nation hard, Venezuela’s banks have shut down. The country recently enacted nationwide quarantine that could help fight the pandemic.

Government is pulling all stops

Venezuela only has 33 confirmed cased of coronavirus to date but President Nicolas Maduro decided that it would be better to place the entire nation under quarantine. To comply with his decree, all banks in the country have shut down for an indefinite period of time. This has crippled the banking system of Venezuela but helped in increasing Bitcoin trading on P2P exchanges.

In a letter addressed to the national, head of the banking regulatory body SUDEBAN, Antonio Morales Rodriguez said,

“Starting Monday, March 16, 2020, all activities involving direct attention to customers, users and the general public through agencies, branches, offices and administrative headquarters throughout the country will be indefinitely suspended.”

Do Venezuelans care about the shutdown?

It appears that the Venezuelan public does not care much about the shut down of the banking system. The country has been struggling consistently because of its economic problems and cash shortage is very common here. With a lacking technological infrastructure and a high dependency on the US dollar, the users have already started to wane off traditional banking.

The informal economy of the nation is thriving on barter, gold, and cash with crypto becoming their newest tool. P2P exchange LocalBitcoins experienced the biggest surge in trading activity this year thanks to rising interest in cryptocurrency. At the end of last month, their traded volume was 491 BTC which rose to 540 BTC. Trades for Bitcoin against the USD were 479 BTC.

Leaving Brazil, other Latin American countries are quickly closing their borders and taking highly cautious measures to stop the spread of coronavirus. This includes Paraguay, Uruguay, Peru, Ecuador, Colombia and Chile where a large number of people have been forced to stay home. Cryptocurrency trading in these countries is rising as well. For instance, the trading volume in Colombia has risen from 289 BTC to 403 BTC in just one week. The last time these figures were seen was in mid-2019 when the price of Bitcoin surged after a year-long crypto winter.

In Argentina, where Bitcoin trading volumes barely cross the 50 BTC mark, traders continue to surge behind this ceiling. This week, traders went past 50 BTC trade volume, a feat that was achieved only 10 times in the past three years.