Not long ago, crypto still felt like that murky subject your business evangelist friend wouldn’t shut up about. Today, as a Venezuelan, you are more likely than not to be surrounded by people who invest or transact in Bitcoin or other cryptocurrencies on a daily basis. It’s not surprising, given that, according to Chainalysis, Venezuela is amongst the leading pack in crypto adoption in the world. 

We all know that the economic crisis has made Venezuelans look for alternatives to their national currency and that people often use cash or payment processors such as Zelle and Paypal for their daily purchases in dollars, given they are secure means for sending and receiving money from one person to another. But such services require a U.S. bank account to access most features in their platforms—this has been widely covered in Caracas Chronicles. So some Venezuelans are now in a position where, in order to participate in the economy, they have to depend on borrowed international accounts from friends or family members to protect their money from inflation or receive remittances. 

As more and more Venezuelans look for alternatives for their payment processing needs, cryptocurrency exchanges are starting to become household options.

Crypto exchanges allow you to make transactions between different types of currency, including crypto and regular fiat currency (government-issued) such as dollars, euros or yen. Right now, there are several of those exchanges gaining strength in the Venezuelan market, the main ones being Criptia, Cryptobuyer, and Binance. 

In the case of Binance, one of the leading exchanges in the Venezuelan market, you need to be 18 years old, have a cell phone, and clear a few KYC requirements before you can have full access to an account. Then, users can purchase cryptocurrency with very low commissions using a debit or credit card or linking their bank (which only works with European or American entities), or access the P2P (person to person) trading table which allows users to trade with others with their own payment methods and prices, using Binance as a middle man—it is in this space where Venezuelans can acquire crypto with bolivars. 

The Binance P2P has allowed Venezuelans who wish to buy and sell cryptocurrency to do so, using the main payment methods used in the country, such as Pago Móvil, Zelle, PayPal, Reserve, AirTM and cash. However, the main currency Venezuelans buy, contrary to popular belief, isn’t Bitcoin but Tether (or USDT), which is dubbed as a “stablecoin” pegged to the dollar, meaning every Tether is worth exactly one dollar.

How Binance Works on the Street

I was able to speak to some consumers and vendors that use Binance and other crypto exchanges every day, to know their insights on how the market has responded to these new forms of payment.

“I don’t have my own Zelle account or an account in any U.S. bank, so whenever I get paid in bolivars I trade my money into Tether immediately before my salary loses value,” says Samuel Ocando, a student who’s currently working at a restaurant in Caracas. 

When I asked if spending the money received in Binance is easy, Omar Espinoza, a worker in a hotel in Merida, offers some insight on the difficulty of the procedure: “So far, in Merida, not all businesses have adapted. Only those who understand crypto and are frequent users are open to receiving payment in crypto. Some restaurants or stores use it as a payment method, since they understand the platform. But there are those who have heard about it but are reluctant to change. Fear is the main factor preventing the spread of crypto as a payment method. People refuse to participate under the assumption that they may fall victim to scams or lose their money some way or another,” says Omar.

The difficulty to understand the basics of cryptocurrency, alongside the convoluted and often speculatory nature of this new market, remains the main reason why people resist the use of crypto in the first place. However, this is slowly changing due to the emergence of more user-friendly exchange platforms. 

The Road Ahead

The crypto space is no longer exclusive for tech savvy individuals and exchanges are looking to promote mass adoption of this new technology. For this to happen, merchants and businesses will play a big role. So far, only a select number of businesses in Venezuela are using cryptocurrency exchanges as a payment method. 

For example, a source in a major satellite TV company in Venezuela explained to me that they were exploring crypto as an alternative form of payment: “We seek to give clients all the payment options available in the market. There are people who wish to pay using PayPal or Zelle and a small segment that uses crypto, so we started accepting payments via cryptocurrency.” 

The segment of people who use crypto may be small, but it’s expected to grow in the next couple of years, now that Megasoft, a Venezuelan payment processing company, announced it will provide several retail chains with points for cryptocurrency payments. Pizza Hut, Traki, the Eurobuilding Hotel and the Excelsior Gama supermarket are among the biggest companies in Venezuela which currently accept cryptocurrencies as a form of payment.

“Receiving the money is relatively easy, as the exchange company we use allows us to receive in dollars all the cryptocurrency payments that are made to us,” the satellite TV source said.

As more companies open up to cryptocurrency in Venezuela, smaller businesses and mainstream payment processors are transitioning to the new crypto age, looking to incorporate cryptocurrency payments into their day-to-day transactions. 

The path to mass adoption, not only for Binance, but for all cryptocurrency exchanges in Venezuela looks difficult. Limited internet access combined with misinformation and confusion is currently halting the expansion of new payment processors. But we must pay attention to these companies, as we may be witnessing the birth of new financial juggernauts, as crypto usage increases and existing exchanges expand their operations in the country, or new ones start operating. The road may be rocky, but the potential uses of cryptocurrency in inflationary and poorly regulated economies like Venezuela’s may outweigh the fears, lack of information and users’ resistance to change.