I keep hearing that, but I am not familiar with any data that shows actual widespread use by common people* in those countries without a functional currency.

Most of these countries barely have a stable internet connection or even stable electrical power, so I wouldn't surprised if these 'currencies' aren't so helpful in practice.

* Note that use by corrupt politicians to launder their ill-gotten gains is not a positive.

It's true that Bitcoin is a poor medium of exchange: it's not stable, has slow transaction times, does not work well with mobile devices, and has intimidating identifiers, but it did open the door to new ideas that will likely soon have a huge impact on exactly the uses you're describing.

I feel like I've been hearing this for over 5 years. I hope it materializes, but to be honest it's hard to not be skeptical, not in the least because a lot of the original values of Bitcoin/cryptocurrencies seem to have been subverted by certain people to serve their own needs (which ... is what usually happens if there are no rules to set boundaries).

I'm a little biased, but check out celo.org and valoraapp.com. Celo is a Proof of Stake protocol built to work efficiently on mobile, with stable value, and with phone numbers as identifiers.

I pay for translation services in cryptocurrency (XMR lately) to Venezuelan citizens who can't readily use USD. Easily thousands of dollars per year.

Cypress in 2013, Venezuela currently.

Cyprus currency is the Euro, hardly a bad local currency as far as value is concerned, and the local residents are already adept in keeping funds in other currencies. Historically, Bitcoin had little marketshare there and made no difference. Are there any evidence of large scale use in Venezuela?

Countries without functioning currencies just use (or at least peg) all transactions to Dollar/Euro, etc

Yes, bitcoin can play a role but it's not like you're paying for your groceries in bitcoin. Cash under the mattress > blockchain

There are simpler solutions, such as dollar bills, or a centralised digital banking system in a trusted currency.

These depend on a functioning legal system in a country that recognizes human rights. Dollar bills may work in incompetent states, but they don't in oppressive ones.