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venezuela-inflation-drags-on -can-blockchain-be-a-solution

Venezuela Inflation Drags on and Can Blockchain be A Solution?

Frederik Bussler
by Frederik Bussler — 2 months ago in Security 2 min. read
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Every day, countless stories are released on the global financial crisis, including stories on the instabilities of emerging market currencies, laying out a myriad of problems, but with few viable solutions. Recently, a Forbes article on Venezuela’s ongoing hyperinflation crisis made the rounds, discussing the laughability of inflation forecasts neighboring 10,000,000%, although the current reality is not all-too-better at over 10,000%.

By any definition, it is a crisis: It is certainly one for those who can barely afford basic necessities, and it is a crisis for these emerging markets that are tasked with solving a seemingly insurmountable problem. Further, this crisis is far from over, as emerging markets face issues beyond inflation, from government seizure to local catastrophe, encompassing everything from downright robbery to the plague of corruption.

The “good” news, if there is any, is that we can hypothetically understand the causes of these problems, which are rooted in financial exclusion. If we were able to build and deploy systems for financial inclusion, we could attack these issues at their core — something governments have failed to do time and time again.



Financial inclusion means making financial services more affordable and accessible, but the size and complexity of financial exclusion, combined with the interdependent, interlocking nature of involved economic organizations, defies easy reforms. Opportunities for alleviating these issues and democratizing finance through the use of technologies like blockchain are often neglected, in favor of “sexier” or easier use-cases, something I’ve noticed in the industry.

However, one company presenting a viable, live, and user-adopted solution is Invictus Capital, an alternative investments platform powered by blockchain. As Daniel Schwartzkopff, Invictus Capital Founder & CEO writes:

“We enable financial inclusion — in developed markets we allow people access to alternatives like venture capital and real estate that traditionally had very high minimums and long lockups. In emerging markets we service entire portfolios as there are no local alternatives.”

Besides greater access to alternative investments, another issue, also pertaining to financial exclusion and with the potential of a 
blockchain solution, is the instability of emerging market currencies like the Venezuelan bolívar. As discussed, issues from inflation to seizure to catastrophe wreak havoc on the lives of many in emerging markets, so there exists a clear-as-day “pain-point.”
Invictus Capital aims to alleviate this pain point by giving people a way to save on the blockchain, such that their capital isn’t subject to these crises. Clearly, the market has agreed that such a solution adds value, as they’ve on-boarded 15,000 investors from 148 countries since their first fund was launched in late 2017.

Ultimately, blockchain-based solutions with such a massive scope of impact are few and far between, but to see Invictus’ user adoption and traction is potentially a harbinger of a bigger and brighter blockchain future.

Frederik Bussler
Frederik Bussler

Frederik Bussler is the Founder of the Security Token Alliance, the industry's largest think tank with over 100 partners. As a public speaker, he has presented for audiences including IBM, Nikkei, Slush Tokyo, and the Chinese government, and is featured in outlets including Forbes, Yahoo, Thrive Global, Hacker Noon, European Commission sites, and more.

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Joey Bertschler
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Joey Bertschler

Great piece!

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