Venezuela Waging PR War on Bitcoin
Bitcoin is shaking up the Internet, but some governments may be trying to shut it down.
Venezuela is in a slow-motion economic collapse. Failed policies have pushed the nation toward bankruptcy, sparking a wave of hyperinflation. To protect their wealth, savers have turned to alternative currencies like bitcoin.
The cryptocurrency’s popularity, however, may have authorities worried. Last week, Venezolana de Television began a campaign against Bitcoin. In a piece published Wednesday, the country’s public broadcaster railed against the digital asset and payment system. (Source: “BitCoin: El sistema cibercriminal,” Venezolana de Television, March 18, 2016.)
Bitcoin, the article explains, is a tool for criminals. The digital currency is a medium of exchange for trading drugs and weapons. Anonymous transactions, the author fears, supports pornography, murder for hire, as well as the piracy of books, movies, music, and software.
“Is it coincidence that the criminal and terrorist groups in the world are the main activists and advocates of bitcoin?” the article asks, according to a Google-translated version of the piece. “This virtual currency is not backed by any institution or country and is used to pay illegal transactions.”
The growing use of alternative money such as bitcoin is even responsible for the financial crisis plaguing Venezuela.
According to Google’s translation tool, the author argues, “For Venezuelans it is no secret the damage it has caused to the economy, the boost and promotion through pages as Dollar Today has been given an illegal and criminal exchange rate system has caused great harm to the national economy, caused induced inflation levels, which do not correspond to the normal parameters of economic development.”
Venezuelans aren’t alone in adopting bitcoin. The digital currency has soared in popularity over the past few years, with people around the world trading via online exchanges such as Kraken. A few weeks ago, the bitcoin price hit a one-month high of $420.00.
Power figures are not pleased. In an interview with Quartz last year, former Federal Reserve chair Ben Bernanke connected bitcoins with terrorist financing. (Source: “Ben Bernanke on bubbles, bitcoin, and why he’s not a Republican anymore,” Quartz, November 19, 2015.) JPMorgan CEO Jamie Dimon believes the government will step in and kill bitcoins should it ever really matter. (Source: “Jamie Dimon: Virtual Currency Will Be Stopped,” Fortune, November 4, 2015.)
Calls against, however, could get louder.
Around the world, central banks are introducing zero and negative interest rate policies. Across much of Japan and Europe, savers are now required to pay for the privilege of depositing money in a bank. Such policies, some analysts expect, could arrive in the U.S. in the months to come.
If bitcoin emerges as a threat to such measures, Venezuela could just be the beginning. Expect governments to step up their campaign against the cryptocurrency.