With the United States government threatening to ban payment processing companies – VISA, MasterCard from processing transactions in Venezuela, the South American nation looks to Bitcoin to avoid the woes and losses these sanctions breed.
According to Bloomberg, the U.S. government under President Trump’s administration is bent on further economic sanctions against the regime of ousted President Nicholas Maduro. This time, the U.S. will seek to prohibit payment firms like VISA and MasterCard who account for majority of Venezuela’s transactions from providing services in the country; a move which is sure to compound the already failing economic woes.
This new sanction seeks to push to the limit initial trade sanctions and bans placed by the U.S. against the nation following prolonged stiff relationships between both presidents as the American government seeks ways to cut off access to funds for President Maduro and his allies.
Currently plagued by a huge inflation, a falling currency value as well as chaos and clamour for a new government by its citizens, Venezuela is in dire need of an economic messiah.
By extension, this impending sanction though pitched against Maduro and his loyalists only, will affect varying sectors of Venezuela’s already weak economy. From aviation, agriculture, healthcare, power among others; none will be spared. Another possible effect would be a spread to other substitute payment companies who for fear of U.S. blacklists would choose to leave rather than become prime target of the U.S government.
Bitcoin the Last Resort
Should this sanction go through and coupled with the current effect of previous sanctions, Venezuelans will be shut out from the global economy and with only one recourse – Bitcoin as the best bet in such scenario, especially considering the failure of Maduro’s launched cryptocurrency – Petro which has failed to live up to its hype.
To this effect and with Bitcoin recently reaching huge adoption potentials and trade numbers in Venezuela, these figures are sure to sky rocket as citizens look for alternative stores of value, payments and transaction channels.
One good point for Bitcoin’s choice is its political neutrality, peer-to-peer transaction pattern and borderless design which is immune personal riffs between political enemies especially those of the government. Hence, while VISA and MasterCard can be cut off, Bitcoin remains immutable and to a large extent free from government censorship.
Do you think these increased sanctions will force Venezuelans and other nations (Iran, North Korea) affected by U.S sanctions to take up cryptocurrency/bitcoin adoption?