Venezuelan President Nicolas Maduro has reportedly said that the Venezuelan government would again extend the validity of 100-bolivar notes (worth some $0.02 on the black market) from Jan. 2 of next year to Jan. 20.
Facing some of the highest inflation in the world as part of a deepening ongoing financial crisis, Venezuela first planned to pull its largest bill from circulation back in mid-December with a plan to introduce new, higher-value notes up to 20,000 bolivars ($5 on the black market).
Critics of the Venezuelan government’s plan had warned that, with well more than 6 billion 100-bolivar bills in circulation at present, there would be no possible way to swap them all out in the time allotted. And even now, the higher-value notes have yet to be introduced.
Though the precise inflation data for 2016 in Venezuela has yet to be calculated, economists estimate it is in the triple-digit range. Economic consultancy Ecoanalítica had estimated that annual inflation this year stood at more than 500 percent.
In an effort to spur other types of transactions, the government said it would cut the sales tax on purchases made using debit or credit cards. Analysts and bitcoin experts are predicting that Venezuelans will be buying bitcoin more as the country faces more economic uncertainty.
Brokerage website SurBitcoin, which helps Venezuelans to buy and sell bitcoin, has reported that, while there were just over 450 bitcoins in Aug. 2014, by November of this year, that number had shot up past 85,000. There have also been additional cases of Venezuelans buying bitcoin in order to purchase Amazon gift cards.
Although bitcoin has historically been highly volatile, it is arguably more stable than the bolivar, which saw 60 percent depreciation in the past month. Meanwhile, bitcoin have seen an unusually steady rise in value in recent months, flirting with breaking over $1,000 for the first time since Mt. Gox collapsed in early 2014.