They are using Bitcoin as an asset much like property, bonds, gold, etc, not as a currency. In this respect you can think of people in this situation as treating foreign currency as an asset as well, as a way to park wealth to hedge against domestic inflation and devaluation.

In extremes like Venezuela or Zimbabwe they do fail at being currencies as well, but the Peso is a perfectly functional currency. It's just not a reliable store of wealth. In developed countries we think of our currencies as both, but they're two distinct functions.