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- Venezuela has turned to crypto as channels like banks and Western Union/Moneygram impose high fees, and Dogecoin is emerging as one of the market leaders in the South American nation.
- With the Venezuelan economy going through one of its worst crises, citizens rely on migrant workers’ remittances, and Doge’s low fees and fast transactions make it ideal.
Dogecoin has been steadily moving away from the “just a memecoin” brand as its real-world use cases continue to expand. Its latest field of disruption is remittances, with the residents of Venezuela turning to DOGE in the face of one of their worst economic crises.
Remittances are a critical cog of the Venezuelan economy. For the past two decades, the country has been ravaged by hyperinflation, rising hunger and starvation, disease, crime, and other woes. This has pushed millions to seek refuge abroad—over 7.7 million people have fled Venezuela in the past decade, according to one study. Last year, around 300,000 Venezuelans landed in the US.
This migration has led the country to rely on remittances increasingly. Some studies say that 30% of Venezuelan households receive remittances regularly and that remittances now account for 6% of the country’s $482 billion economy.
While remittances are a lifeline, Venezuelans face the same challenge that most in the developing world still face despite advances in financial technology—the cost of receiving money is prohibitively high and access is shockingly low.
Dogecoin to the Rescue
This is where crypto has come to the rescue. According to R4V, an inter-agency assisting refugees from Venezuela, the country received $5.4 billion in remittances last year, and over $461 million, or around 9%, was in crypto. As the graph below from Bloomberg shows, crypto has become increasingly important, from contributing just under $200 million in 2020 to the current level.
Dogecoin has emerged as one of the cryptocurrencies of choice for many. As one Venezuelan immigrant told Bloomberg, DOGE has “the lowest transfer fees she could find, as compared to other cryptocurrencies or stablecoins which have higher fees in US platforms.”
The Dogecoin team took to social media to highlight its rising importance in Venezuela, stating:
While many crypto projects chase gains, Dogecoin’s purpose is to be a simple means of exchange for everyday people. Shibes around the world are putting Doge to real use.
While crypto has made the remittance process easier for millions, it has its own set of risks. For one, most cryptos, including Dogecoin, tend to be volatile. As Crypto News Flash reported, some like Celestia (TIA) gained 16% in the past day, while others like Pepe bounced back 12%. But while today most tokens gained, sometimes they lose value, making them unsuitable for long-term holding. Stablecoins have reduced the impact, with Tether being especially popular in Venezuela.
While most coins bounced back today, Dogecoin traded sideways and changes hands at $0.1072 at press time. Its trading volume dipped 35%, mirroring the broader marker whose overall volume has dropped to $72 billion after hitting $98 billion on Monday.
