The authorities of Venezuela have established a set of ambiguous regulatory frameworks that significantly reduced the circulation of foreign currencies in the local black market. Venezuelans, who are struggling to move money in and out of the country, are beginning to turn to Bitcoin as an alternative.
The South American Bitcoin industry and infrastructure are well established. Venezuela alone has two major Bitcoin exchanges including Surbitcoin, which has recently demonstrated a rapid surge of demand for Bitcoin in the region.
However, local financial regulations and the consistent pressure from local authorities make it difficult for users to trade digital currencies like Bitcoin. The tightened policies of Venezuela even restricts the operations of local Bitcoin exchanges.
As an alternative, Venezuelan residents have begun to use LocalBitcoins, a peer to peer Bitcoin trading network, to purchase and sell Bitcoins in the region. The sudden increase in the userbase of LocalBitcoins has led to all time high trading volumes for the exchange in Venezuela, recording nearly 170,000,000 bolivar trading volume on a daily basis.