Protests in Belarus will Lead to Cryptocurrency Popularization
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Protests in Belarus will lead to cryptocurrency popularization growing
The Belarusian ruble is falling against the backdrop of the political crisis in the country. Usually, in such a situation, the population’s interest in bitcoin and other digital money is growing. They invest in them in an attempt not to lose savings.
On August 24, the Belarusian ruble fell another 2% against the dollar (to 2.5364) and by 1% against the euro (to 3.0186). As a result, it updated its all-time low below 3.0186. This happened against the backdrop of the continuing protests in the country and the crisis, as a result of which citizens began to buy foreign currency.
Reasons for the growing interest among Belarusians in cryptocurrency
ATMs started emptying in Belarus last week over rumors of a government plan to freeze deposits in state-owned banks. The information caused a public outcry and a shortage of currency. However, the next day, the government of the country assured that they didn’t intend to prohibit the withdrawal of deposits in state banks and to suspend foreign exchange operations. Residents of Belarus began to actively buy dollars, explaining this by the fall of the national currency. According to the newspaper, queues lined up at exchange offices.
At the same time, Goldman Sachs analysts Zach Pandl and Charles Himmelberg said that digital money could become a viable alternative to traditional financial services in countries with underdeveloped economies. Full legalization of a new type of assets in the country can also become an argument in favor of the possible popularization of cryptocurrency in Belarus during a period of uncertainty. The industry is tax-free and citizens can legally conduct any digital money transaction.
“The depreciation of the Belarusian ruble and the restriction on the sale of the US dollar undoubtedly gives rise to interest in electronic money that is not tied to traditional banking systems. In such cases, interest in cryptocurrencies and electronic wallets always grows,” – explained Filipp Modnov, CEO of LAZM.
He added that many active people who previously did not trust this segment will definitely look for salvation in cryptocurrency. However, the number of new users will not be radically added, since the population has problems with access to the Internet and with free money.
Cryptorg.Exchange CEO Andrey Podolyan agreed with him. He added that Belarusian traders are very active in the cryptocurrency markets, although some leading cryptocurrency exchanges do not allow the citizens of this country to trade at home. However, Belarus is heavily immersed in IT and other modern technologies.
“The demand for cryptocurrencies will increase due to the political situation in the country. There is a shortage of dollar liquidity, the rate of the local currency is going down, so alternative sources of capital rescue will be relevant, ” – Podolyan said.
Earlier, Belarusian IT companies signed an open letter against violence in the country. Business representatives stressed that under the current conditions, a tech business cannot function in the country and new start-ups cannot appear. Companies claim the presidential election was rigged.
Cryptocurrency popularization on the example of other protesting countries
Usually, in countries with serious economic problems, there is an increase in the demand for cryptocurrency. For example, in the summer of 2018, a crisis occurred in Turkey, the exchange rate of the local lira fell by 45% in six months. This led to a sharp increase in the volume of digital money trading, people began to actively buy bitcoin.
In Argentina, for example, there is a strong demand for bitcoin. The country is experiencing a gradual depreciation of the peso. And cryptocurrencies became especially in demand when the government introduced restrictions on the purchase of the dollar. Also, digital money is popular in Venezuela, where the local bolivar is experiencing hyperinflation. Against this backdrop, local residents began to use cryptocurrency as a store of value. Therefore, if the economic situation in Belarus worsens, it is likely that the demand for digital money will grow in the country.
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