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What is happening with the digital economy in Venezuela?

In a context in which the economic outlook is uncertain, adaptability is a resource for all those who live in Venezuela. That is why every day new companies provide digital alternatives to the services that are common in the territory. Thus ensuring its relevance in a difficult environment, but where there are many opportunities thanks to the great shortages that exist. In this sense, the digital economy has managed to position itself for many years as an alternative to paper money. But as a result of the high transaction traffic, several initiatives are needed to support the country's economic activities. In this article we will talk about the acceleration of the digital economy in Venezuela.

What is the digital economy?

The digital economy is an economic model where development is based on digital procedures. So its operation is through internet and satellite connections that seek to streamline traditional business processes. This is the origin of the so-called e-commerce, which ranges from financial institutions to online stores with different payment systems.

These digital initiatives impact payment schemes, financial technology and financial momentum. So they have become tools that work nationally and internationally to keep the financial sector stable. It is expected that the whole world will adhere to these new initiatives to significantly improve the quality of life of the inhabitants.

Digital economy in Latin America

In Latin America there is a constant emergence of internet-based ventures. One of the methods that expanded the most during the pandemic was online commerce from social networks or mobile applications. In this way, the Internet became the main sales channel for many companies that did not stop offering their products or services. This has allowed the economy not to stop and money continues to circulate in different territories. In that sense, restaurants and retailers have chosen to migrate to the digital environment and have become a reference for the entire continent.

Different digital experiences, such as the case of the delivery app Pedidos Ya, have shown that South America is a territory of opportunities. In addition, the digital ecosystem has advanced infrastructures that allow the stable provision of internet. Therefore, the dissemination and access to information has been positive for different industries that can now sell products faster. In many cases the productivity of companies has increased, thanks to the increase of customers they have managed to obtain in digital media.

Acceleration of the digital economy in Venezuela

In the case of the digital economy in Venezuela, it has grown since 2020 on par with the rest of Latin America. Services such as p2p, c2p, digital wallets and interbank payment gateways to settle commercial transactions have flourished here. Thus, financial transactions have not collapsed in Venezuela due to inflation, lack of paper money, among others. In addition to that, proposals are being carried out to provide easy access to all Venezuelans to cryptocurrencies, tokens and other digital assets. Therefore, one of the direct consequences of applying these digital tools has been the adoption of foreign currencies without the need of traditional banking.

On the other hand, the web portal Five8 estimates that by 2022 some banks will regain control over payment methods, thanks to the implementation of foreign currency accounts. Likewise, it is expected the increase of digital payment products where traditional banking will gain ground. On the other hand, discussions about cryptocurrencies have not evolved beyond the legal framework they already have. So the legality of use is maintained, at the same time that these digital alternatives include cryptocurrencies. These changes have allowed restaurants, hotels, travel agencies, among others, to accept cryptocurrencies through exchanges such as Binance, AirTM, Cryptobuyer, etc.

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