Syed Imran Haider 
Another cryptocurrency service went offline on 9th February 2023. The peer-to-peer Bitcoin exchange site LocalBitcoins announced its shutdown as the final nail to the coffin.
The announcement cited the difficulties the lengthy crypto winter presented as why it “can no longer perform its Bitcoin trading service.”
LocalBitcoins, launched in June 2012, contributed to validating Bitcoin’s primary use case: a decentralized, global P2P electronic payment system. It propelled Bitcoin into prominence as a significant possibility for building cryptocurrency communities – particularly in nations with less than stable political leadership.
Venezuela was one of the most prominent nations to use Bitcoin, especially during the most recent boom cycle.
LocalBitcoins in Venezuala
The introduction of unilateral sanctions against the Government of Venezuela made it challenging for the public to transmit money from abroad. International financial institutions especially faced difficulty carrying out routine business with Venezuelan financial institutions.
Similarly, companies like Transferwise and MoneyGram ceased operating in the country. As a result, there were few options available to many Venezuelans living abroad who wanted to send money to their families abroad.
Enters LocalBitcoins: The exchange site filled the gap, allowing quick and secure money transfers. It was especially enticing to Venezuelans, who could use Bitcoin as an inflation hedge in addition to dealing with an unpredictable economy, political sanctions, and economic isolation.
LocalBitcoins assisted Venezuelans in using BTC as cash in addition to payment transfers. As a type of dollar replacement, they would purchase Bitcoin and then sell it when they needed fiat money.
Additionally, the platform enabled them to utilize their Bitcoin to buy items from other countries using gift cards and shops that accept cryptocurrency.
What Will Happen Post-LocalBitcoin?
The sociopolitical environment in Venezuela made P2P crypto trading more advantageous than regulated platforms. Regulated sites forbade the use of Venezuelan currency, and local cryptocurrency platforms were unstable, with low volumes and subpar infrastructure.
Despite initial worries, the closure of LocalBitcoins will probably not have much of an impact on the Venezuelan ecosystem.
As a matter of fact, activity on the site has decreased since its peak in 2018, and it now only sees a weekly exchange of about 30 BTC, down from the 2487 BTC transacted in February 2019.
Many companies have suffered fatal blows due to the crypto winter, and LocalBitcoins is no different. It is possible to conclude that LocalBitcoins was already dead in the eyes of many citizens, even though it opened a crucial chapter in Venezuela’s crypto history.
The declaration made on Thursday just served as a formal notification that LocalBitcoins will no longer be available to them. To be fair, Binance has already filled the gap left by LocalBitcoins.
