It is estimated more than three million Venezuelans have fled the country, a group comprising what is being called the Bolivarian Diaspora. The government recently dictated a new set of rules that will make it very difficult to operate electronic banking apps and platforms from outside the country. Many who have left use shadow brokers and other private services to send badly needed remittances to their families who remain trapped. An already dire situation just might grow more desperate.
Venezuela Makes Remittance Banking More Difficult
The government of Venezuela has taken new steps to block Venezuelans from receiving help from outside the country. The banking regulative institution SUDEBAN has released a new set of rules that states residents of Venezuela traveling to the exterior need to report their travels to banking institutions to keep operating their bank accounts without suspension.
This has been the latest development in a fight the government has picked over remittance services it feels eats away at revenue. The Venezuelan government has control that monopolizes the exchange of dollars to state or state-authorized services. Private, outside services offer a lower exchange rate for Venezuelans who need to send remittances to the country.
“Out of the system” traders often offer better exchange rates and also almost immediate transactions compared to the government. Those outside their country and their families are the main persons impacted by this measure. While this measure was approved in August of this year, it is just now being applied with a twist.
VPNs Out, Worries Up
Brokers outside the country had been relying on virtual private network (VPN) services to spoof their location and avoid detection. The government caught up quickly, and now SUDEBAN has also stated they will only deal with assigned national internet companies. This leaves a pretty big number of families without their providers to send remittances, and they’re stuck with only the government’s gateway system.
Many of these families value the privacy a shadow broker can give them. In a country where the minimum wage is less than $10 dollars a day, and the government is constantly monitoring operations, many people prefer their peers to not know they are getting remittances.
Earlier this year there was a government crackdown on these brokers and the banks helping to make such exchanges. This operation was called Paper Hands, and it took down many vital private services. More than 100 people were apprehended, and the biggest national bank, Banesco, was also sanctioned.
However, Venezuelans are starting to rely more and more on cryptocurrency to send money to their families and loved ones still locked inside the country. Crypto trading in Venezuela has grown exponentially, even in this bear market. LocalBitcoins, one of the most popular cryptocurrency markets, has experienced a boom with a new record for bitcoin trading just this last week.
While there are people buying bitcoin as a store of value, there are also people using bitcoin as a mean of exchange to send remittances inside and outside of the country. It is expected for this number to keep growing as the government tightens controls on normal bank transactions.
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