Mass unemployment
According to the last report published by the ILO, the unemployment rate at the Latin American Region for 2019 is 8.1%, a figure up 0.1 percentage compared to the previous year. In 2020, this figure doubled in many countries in the area because of the CVVID crisis.
Nearly half of the active population of Venezuela could be unemployed by the end of 2020. The IMF provides for an unemployment rate by almost 50%, the highest in the world. This projection is not only related to Covid-19, although the blockage has made life more difficult to most Venezuelans.
More than five million Venezuelan workers in the informal sector have stopped earning money during closing.
Unemployment in Argentina has reached its highest level for 16 years, to 13.1% in the second quarter 2020, revealed Wednesday the National Office of Indec Statistics, pushed up by the economic crisis and the pandemic of coronavirus .
Indec data are the badest officially registered since 2004. In the first quarter of the year, the unemployment rate was 10.4%, an increase of 2.7 points. In the second quarter of the previous year, in 2019, the unemployment rate was 10.6%.
The currency crisis
The scourge of depreciation is a major concern for Latin American countries. Depreciation has considerable effects on foreign exchange in these countries. Just as the opposite is also true. But the currency crisis has a single source in Latin America: the need for the dollar. That it is at the level of Venezuela or Argentina, the currency crisis results from the desire for the people to acquire the US dollar.
The Argentine economy has always been a pro dollar economy at the point where the economy has almost dlerged at the end of the 20th century. It is not surprising that in the face of the economic crisis in the country for more than two years Argentinians want to grow their dollar savings. For Venezuela, the currency crisis is observed following the US decision to freeze the accounts of the various US oil companies. Hence the problem of rarity of dollars in Venezuela and moreover the currency crisis.
Bitcoin: Gateway to the dollar
To understand how Bitcoin became a dollar gateway, we must come back with Gresham's law on the substitution of currencies. If the dollar has always been the substitution currency of the Peso, Bolivar or other Latin American currencies. The scarcity of the latter forces the Latin American countries to a recourse currency considered equivalent to the dollar.
We emphasized up there in Argentina, 70% of the deposit of the banking system was done in dollar. In order to discourage agents from saving dollar, the Argentine state applies a 35% tax on all dollar deposits. Since the taxation makes the cost of important savings, many take refuge towards Bitcoin to grow their savings in the face of depreciation of their local currency.
In a survey conducted by Cripto 247 on behalf of Paxful in June on a sample of 1113 Argentinians between 18 to 55 years. 69.5% reported having invested at least once in Cryptos, the main reason being its ability to "provide an economic shelter against the depreciation of the local currency due to inflation (42.7%)." In addition, 67.8% of respondents estimate that "Cryptomonnaire investments are extremely safe" compared to their local currency.
In addition, respondents were specifically interviewed on Bitcoin. Among those who have invested in the BTC, 53.9% said that the world's potential of Cryptomonnaie was the reason. In addition, 50.6% stated that decentralization was the main factor and 49.1% reported having invested because of the "overall bitcoin ability to provide security within an otherwise tumultuous banking system.
The worsening of the economic crisis in Venezuela has led to the massive adoption of Cryptomonnaie, with more than $ 8 million in Bitcoin exchanged peer-to-peer each week, depending on the CORNDANCE data. The government recently signed a new tax agreement that allowed it to begin to collect taxes and royalties with Petro State crypto.
Cryptos Market in Latin America
The cryptomonnaire market in America is important. Brazil is the country that realizes the most transactions related to cryptos in the area. Just after comes Venezuela and Argentina. The peculiarity of Venezuela is that it is the third largest global user of localbitcoins and paxful, two of the most popular Peer to Peer Exchanges in the world.
The region is second in terms of retail cryptography, defined as transfers of less than $ 10,000 in cryptomonnia.
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