LocalBitcoins Transformed Crypto Finances in Venezuela—Now What?
The shutdown announcement on Thursday was just the final nail in a mostly closed coffin.
Another day, another crypto service shuts down. LocalBitcoins, a peer-to-peer Bitcoin exchange platform, announced its demise, saying it “can no longer provide its Bitcoin trading service” due to the challenges of the protracted crypto winter.
They were an important part of the hardest moments in my country, Venezuela. We will never forget them. Thank you for your service.
Launched in June 2012, LocalBitcoins helped prove the main use case of Bitcoin: a global P2P electronic cash system free from centralized control. It catapulted Bitcoin into prominence as a huge opportunity for developing cryptocurrency communities—particularly in countries with less than stable political leadership.
Venezuela was one of the most notable national adopters of Bitcoin, especially during the last hype cycle.
“LocalBitcoins was the main reason for the huge use of Bitcoin in Venezuela during the 2017-2019 period. The huge volume moved in the country made the world realize that Bitcoin was being used in Venezuela,” Ernesto Contreras, Head of business development of Dash—and cofounder of the Caracas Blockchain Summit—told Decrypt, recalling that he began to familiarize himself with the platform during that time.
LocalBitcoins in Venezuela: A Case Study
The implementation of unilateral sanctions by the United States against the Venezuelan government made it difficult for individuals to send money from abroad to Venezuela. International banks were unable to conduct normal operations with Venezuelan banks, and businesses like MoneyGram and Transferwise stopped servicing the country. This left many Venezuelans abroad with few options when attempting to send money to their families in other countries.
LocalBitcoins filled this gap by allowing for the reliable and fast transfer of funds. This was especially appealing to Venezuelans facing an unstable economy, political sanctions, and
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