Cryptocurrencies become essential for Venezuelan families’ remittances

Cryptocurrencies are increasingly being used by Venezuelan families to send remittances to the country, which is beginning to recover from one of the worst economic crises in history, according to a report of Bloomberg.

In 2023, Venezuelan migrants sent $5.4 billion in remittances, According to the Inter-American Dialogue, this represented at least 6% of the national GDP. The figure is almost 75% more compared to the remittances sent in 2021.

But he stressed that 9% of these transactions, approximately 461 million dollars, occurred in the cryptocurrency market.

How do cryptocurrency remittances work?

Remittances are money sent, generally from one country to another, by immigrants to their relatives, in order to help them financially. They represent an important source of income for many developing economies..

Traditional remittance transfers occur with Western Union (represented by Zoom in Venezuela) or MoneyGram services; or through international banks. But they have high transaction fees and, depending on the service and payment methods, they may take a while.

Cryptocurrencies offer the advantage of speed and can bypass government restrictions with better commissions.

In Venezuela, remittances have become an important part of the economy. At least 30% of households have started receiving them, according to the Inter-American Dialogue study and data from the blockchain analysis firm Chainalysis.

How many Venezuelans are abroad?

The Interinstitutional Coordination Platform for Refugees and Migrants from Venezuela reports that there are more than 7.7 million Venezuelan migrants and refugeesBy comparison, a country at war like Ukraine has only 6 million displaced people.

This exodus has been key to the increase in remittances to help families.

Manuel Orozco, director of the Migration, Remittances and Development Program of the Inter-American Dialogue, commented: “The number of Venezuelan migrants sending remittances has increased by 50% to 60% (…) It is not a large percentage because the rest of the immigrants still cannot afford to send money.”