Friday, January 21

Adoption of bitcoin and stablecoins in Venezuela forces the closure of Valiu

Key facts:
  • Valiu will allow users to withdraw their funds until December 15.

  • Valiu CEO Simon Chamorro said there were challenges they couldn’t overcome.

Stablecoin digital wallet provider Valiu reported that it will close operations. The scheduled date for their work is next December 15.

Among the reasons that led to the dismissal of Valiu, are the increased adoption of bitcoin (BTC) and other cryptocurrencies, as well as the de facto dollarization that Venezuela is experiencing.

“In three years Venezuela dollarized, started a pandemic and radically increased the adoption of cryptocurrencies.” Given this scenario, the company ensures that “failed to adapt quickly to this new normality”, reported through a release posted on their social networks.

In this sense, they made known to the users of the platform for payments and remittances through stablecoins, that their funds are safe and They will have the opportunity to withdraw them until December 15, date on which the company will close its doors.

To facilitate the withdrawal of money, Valiu ensures that he made available a team of people who will give advice and support.

According to Simón Chamorro, CEO and founder of Valiu, the US-based company, he had to face “very great challenges and risks,” which for a small company “became very difficult to overcome.”

Valiu, among other things, accuses the closure of factors such as the pandemic and the dollarization of Venezuela. Source: adobe.stock.

Valiu was founded in 2018, so that Venezuelan people and businesses could convert their bolivars to dollars and protect themselves from inflation. They operated with their own stablecoin called the dollar valiu (USDv).

Bitcoin adoption turned against Valiu

As mentioned at the beginning, one of the reasons for the cessation of Valiu’s operations is the increase in the use of cryptocurrencies in Venezuela.

A piece of information that confirms the adoption of crypto assets by the Caribbean country, was the one exposed by the firm Chainalysis. In the study they assure that in Venezuela, between July 2020 and July 2021, they received $ 28 billion in crypto assets, a fact reported by CriptoNoticias.

On the other hand, they point out that 6.7% of the volume of transactions in Venezuela is made up of retail operationsAll of this is driven by hyperinflation and the devaluation of the local currency, the bolivar.

They also suggest that cryptocurrency platforms or exchanges have become popular. Visits to the web pages of companies such as Binance and LocalBitcoin increase as the bolivar loses value.

In fact, Binance has penetrated so much into the Venezuelan economy that it is taken as a reference to set the exchange rate of the bolivar.

Binance’s P2P system also has support for other cryptocurrencies and stablecoins, such as Tether (USDT), DAI or Binance USD, issued by the platform itself.

These financial alternatives to which Venezuelans have turned are part of the transformations that the economy of that country has undergone in recent years.