Cryptos are going to save Venezuela

Robert Koenig
Published in
5 min readJul 25, 2018


Not really. I am from Colombia (neighbor country to Venezuela) and lately I am hearing many stories how crypto enthusiasts want to save Venezuela using cryptos. It is noble when people want to help, but in the case of Venezuela I see that many ideas will not lead to any results.

The stories

Fighting for Freedom in Venezuela: How Crypto Helped Héctor’s Family Buy Food (Bitcoinmagazine, Jul 6 2018) , “On July 1, 2018, Héctor* received 0.5 nano. The transaction was a first for the Venezuelan, and he received it thanks to a donation from one of his fellow countrymen. To some, the roughly $1.80 sum in USD may be inconsequential. But to Héctor, whose country’s native currency is worth next to nothing, it was a godsend.”

Another Cryptocurrency Makes Inroads in Venezuela (Bitcoinmagazine, Jul 23 2018), “Dash’s transaction traffic on Cryptobuyer isn’t limited to market speculation. On the contrary, dash has experienced extensive adoption by Venezuelan vendors and merchants. Some 522 domestic store owners accept dash in the country, Valenzuela told Bitcoin Magazine. A Discover Dash website acts as a directory to many of these stores. Calvin Klein and Polo in Caracas are now accepting Dash!”

A Plan to Send Millions in Bitcoin to Venezuela Is Moving Ahead (Coindesk, Jun 29, 2018), “Wheeler and Crena are looking to strike up partnerships with the Human Rights Foundation and the United Nations as well. They’ve even been talking to economists to find out what some of the unintended consequences of dropping a load a new online currency across a country with a damaged economy might be. But even as they make these connections, they’re eager to get the app up and running to test the concept. And then after that, it’s all about securing the funding that’ll buy the bitcoin to be airdropped to Venezuelans.”

The government will support us. I heard from two groups that they are currently talking to key people in the Venezuelan government with their objective for the government to support them. Both groups said that they had great discussions and that the government will support them. This is my point of view: that is never going to happen. Do you really believe a government that is not taking care of their own population is interested in supporting you? After the failure of the infamous PETRO that nobody is interested in? And in addition, don’t forget that the US government will not be a big supporter of ideas that help the Venezuelan government.

The reality 1: One Bitcoin costs over 220,000 USD

Due to the high rate of inflation in Venezuela, there is a high demand in the market for US Dollars (USD). However, official access to US Dollars in Venezuela is limited, which has resulted in a (unofficial) black market exchange rate which is over 20 times higher than the official rate. That means if you obey the law, one bitcoin would not cost $9000 USD, but $180,000. That is One hundred eighty thousand USD for one Bitcoin. Localbitcoins for example offers bitcoins starting at $225,180 USD (when the official exchange rate is applied).

The 15th of June 2018 Vice President Tareck El Aissami said: “The government of Venezuela has started monitoring the bank accounts of its citizens for cryptocurrency-related transactions. Accounts found to contain crypto transactions at prices which the government considers to be “undermining the national currency” will be “severely punished,”. This new phase was launched last week with a focus on what they call “gold smugglers,” or Venezuelans who bought cryptos and gold from small miners and then sold it outside of the country. The operation has “detected that these mafias have distorted the prices of the dollar,” the country’s Vice President Tareck El Aissami declared, adding that “they have migrated through the market of cryptocurrencies to hit the Venezuelan monetary system.”

The operation further targets capital flight via cryptocurrencies. El Aissami explained that the government will start monitoring bank accounts for crypto-related transactions and will prosecute those trading them “at speculative prices.” All the accounts that we identify that are linked to the manipulation are going to be severely punished and (those responsible will be) placed at the order of justice.

The reality 2: Poverty

Over 90% of Venezuelans live in poverty. In 2018 the absolute poverty (defined by the World Bank: income under $1.90) climbed to 62%. Great deal — I guess — if Calvin Klein is accepting DASH when at least over 90% of the population does not have access to those products? Solutions and ideas that are aiming to help Venezuelans should not focus on the 1%, rather than the 90% that don’t have enough to eat.


Helping the richest 1% in Venezuela (those that have money to buy computers, speak English and usually don’t have difficulties traveling to the USA) is easy. Helping the poor on the other hand is very difficult. In a socialistic country that is infiltrated by Cubans, everything is controlled and regulated by the government. Only they and the population have the power to change things significantly.

I believe the most successful way to help the vast majority of Venezuelans is by enabling those that fled the country to Colombia. Officially over 800,000 crossed the border so far and an additional 50,00 are crossing every month.

Colombians are supportive of this immigration as not so long ago (when Colombians had themselves problems) many Colombians fled to Venezuela. Colombians are still thankful that Venezuela gave them a new home. They also see Venezuelans as their “brothers and sisters”.

Venezuelans that are now living in Colombia are sending food and money back to their families in Venezuela. When sending money, families are allowed to use a much better exchange rate (only around 20% under the black-market rate). So why not help Venezuelans that are in Colombia?