Venezuela Shut Down Banks Due to Outbreak, Bitcoin Trade Increased

Cointral Marketing Manager
Venezuela Shut Down Banks Due to Outbreak, Bitcoin Trade Increased

Although there are 33 cases of coronavirus in Venezuela, President Nicolas Maduro took quarantine measures in the country to prevent the spread of coronavirus that affected the world. According to the decisions announced by Maduro, the entire national banking system is closed down indefinitely. With the impact of these decisions, Bitcoin trading in Venezuela has increased.

Antonio Morales Rodriguez, the president of SUDEBAN, the highest-ranking regulatory agency for all banking activities in Venezuela, issued a letter urging them to close their doors indefinitely at the beginning of the week:

“Starting on Monday, March 16, 2020, I am writing this letter to inform customers, users and the general public that their activities that will require direct contact to the public will be suspended indefinitely through nationwide agencies, branches, offices and administrative centers.”

In addition to these, it was noteworthy that the closing of banks was not seen as remarkable news by the people of Venezuela. Factors such as cash shortage, dependency to USD, and weak technology structure caused Venezuela to leave the traditional banking system after many years. Another negative functioning aspect of Venezuela is the existence of the informal economy. A lot of people turned to cryptocurrencies instead of cash and gold.

Apart from Venezuela, other countries in Latin America are taking steps to increase the measure against coronavirus epidemic. Countries such as Chile, Colombia, Ecuador, Peru, Uruguay and Paraguay have closed country borders, and the vast majority of the population in these countries has been quarantined.

While these measures are being taken in these countries, the cryptocurrency trading volume has also increased. For example, the trading volume of Bitcoin in Colombia has been on the rise since the middle of 2019. It rose from 289 BTC to 403 BTC in a week. Traders in Argentina have exceeded the 50 BTC limit.

Investment information, comments and recommendations contained herein are not included in the scope of investment advisory. Therefore, making an investment decision based solely on the information and comments contained herein may not produce results that are in line with your expectations.