After near total economic collapse in 2008 with their currency experiencing 11.2 million percent hyperinflation and fears of it happening again, the government has taken a "full control" stance on everything financial, even locking their citizens out from using any credit card transactions.
This has sent people flocking to bitcoin for financial security, all while at the same time fears of new rounds of hyperinflation circulate.
In other words - after being locked out from Visa and Mastercard, and a government providing totally untrustworthy paper FIAT cash that could become worthless at any time, Bitcoin is a shining beacon of hope.
A similar dynamic is happening in Venezuela, it's being called "Bitcoinization" - basically, when a government screws up so badly, people stop looking towards them all together and turn to the blockchain to provide the oversight their government isn't.
Just a couple weeks ago, we covered a story where the government of Venezuela even began blaming Bitcoin miners for city wide power outages, as the popularity of cryptocurrency grows while the value of their dollar declines.
In a surprising twist - this has made actual daily use of cryptocurrency common in countries like Venezuela, buying a beer at a bar or even paying for a doctors appointment in bitcoin is part of daily life there now.
And it shows in their transaction volume - this time last year about $200,000 week was being spent within Venezuela - that number is now at $2,100,00!
Surprisingly, some 3rd world countries have even gotton creative, creating what is basically cryptocurrency out of other digital assets like cell phone minutes. In poor nations where cell phones function on pre-paid minutes, want a gallon of milk? You can pay for that by transferring 60 minutes of cell phone time from your account to the sellers.
In developed nations while we're experiencing a battle and endless debates over crypto VS fiat - these underdeveloped nations are ready to make the switch now.
That's where crypto companies like BABB (GetBABB.com) are stepping in, reaching out to the 2+ billion who have access to a phone, but unreliable, or no banking at all.
BABB however is taking things up a notch from simply allowing the sending and receiving of cryptocurrency - they're turning the user into a bank themselves, and are giving the ability to have friends, family, neighbors open accounts in their new virtual bank - and even issue them cards.
We've seen examples of this before, where nations skip entire portions of usual development. In 3rd world countries where cell phones are common - land lines are not. Corporations never came in and built the infrastructure needed for land lines - but cell phone companies did come in and put up towers. The same could happen with banking and cryptocurrencies.
These nations may never see a physical bank built in their city - but soon may have fully functional banking on their phones - thanks to the blockchain.
Author: Ross Davis
San Francisco News Desk
