According to reports and social media, bank branches in Venezuela are closing their doors as the Coronavirus continues to spread. People are turning to Bitcoin as the solution as trading volumes increase.
Venezuela has had more than its fair share of problems over the past year or so with political unrest, hyperinflation and economic turmoil. The spread of the coronavirus (Covid-19) has added to them as the Latin American nation’s banking system feels the strain.
Bank Branches Closed
Reports are emerging that physical bank branches in Venezuela have been shuttered, which has led to a spike in digital asset trading.
Several first hand reports on crypto Twitter have confirmed this. Mythos Capital founder Ryan Sean Adams tweeted that the banking system had been halted indefinitely, locking 32 million people out. This was later retracted with a note stating that online banking services were still available.
Conflicting reports! But Venezuelans on the ground are reporting that only only physical branch operations are halted
Digital banking is still working
It seems the cointelegraph and Decrypt sources were nnot accurate
I plan to remove the tweet below shortly https://t.co/3CetR6x7Lg
— Ryan Sean Adams – rsa.eth 🏴 (@RyanSAdams) March 20, 2020
So far, Venezuela has not been inundated with Covid-19 cases, with only 65 reported, according to this Johns Hopkins University tracker.
Earlier this week, President Nicolas Maduro brought a country-wide quarantine to slow the spread of the virus. The government hopes that these emergency measures will prevent its already heavily burdened health system from becoming overwhelmed. Maduro also ordered the closing of businesses and set up roadblocks to limit movements last Friday.
According to The Washington Post, neighboring nations are fearful that infected migrants will flee Venezuela’s broken health system. [The Washington Post]
Petro Down, Bitcoin Up
The coronavirus threat also appears to have hampered Venezuelan efforts to force adoption of its oil-backed Petro cryptocurrency.
In January, Maduro attempted to bolster the Petro by launching a Petro-powered casino and declaring all airline fuel sales for international flights to be conducted using the cryptocurrency.
Venezuelans have largely disregarded the Petro, however, in favor of Bitcoin as volumes start to ramp up. According to Coin Dance, March has seen an increase in bolivar to BTC trade, which has been mirrored in many other South American nations.
As a result, Bitcoin has been trading at a premium in the country, with Localbitcoins quoting prices above 500 million VES, or almost $7,000 at the time of writing. This is around $800 higher than the current price of BTC at the time.
The closure and restriction of banking services has clearly increased the demand for Bitcoin, which is playing the role it was destined to.