Venezuela’s President Promotes Crypto In Attempt to Prevent Economy Collapse

In August, Venezuela will replace its national currency, the bolivar, with a new one, bolívar soberano (or the Sovereign Bolivar), that will be tied to the petro token. The news comes just days after the International Monetary Fund (IMF) predicted that Venezuela’s inflation will soar to one million percent by the end of the year. The country’s economic turmoil compares to Germany’s after the first world war and Zimbabwe’s at the beginning of the last decade, said Alejandro Werner, head of the IMF’s western hemisphere department.

Fortune informs, declining oil revenue and the declining value of Venezuela’s bolivar currency has contributed to the country’s economic crisis, with starvation on the rise and reports that the nation’s hospitals lack the appropriate supplies to care for the increasingly ill. 

“The whole country is crying out for great economic changes, for stability, wealth generation, and the satisfaction of our people’s needs,” Maduro recognised from the presidential palace during the latest press conference.

“I ask for your confidence, I ask for your support, beyond ideologies and political positions, because Venezuela needs this change.”

The president added that the government would strip five zeros from the bolivar rather than three as had been initially planned, Reuters reports.

In December last year, Maduro announced that Venezuela would create its own Bitcoin-like cryptocurrency to “defeat the financial blockade and move toward new forms of international financing for the economic and social development of the country.” The petro, or petromoneda, launched in February 2018, is claimed to be backed by the country’s oil and mineral reserves. It will be an instrument for the Bolivarian Republic of Venezuela’s economic stability and financial independence, the token’s page on ICObench stated.

Maduro did not reveal details about how petro would support the Sovereign Bolivar, but he said that the coin would allow Venezuela to «advance in issues of sovereignty» and that it would make «new forms of international financing» available to the country.

It should be mentioned that earlier this year the U.S. officials had welcomed the petro launch with the new wave of anti-measures. Later in May, American officials accused Venezuelan President and the No. 2 official in the country’s ruling party of profiting from illegal narcotics shipments, the first time that Washington has publicly linked Maduro to the drug trade, Reuters reports.

For all that, petro anchored to the national fiat currency is allegedly part of Maduro’s strategy to avoid hyperinflation so much as US sanctions. Not so long ago, the Venezuelan officials have launched a number of projects anchored to petro. In spring, Maduro announced the launch of a petro-funded crypto bank to support youth and student initiatives. In July, The Ministry of Habitat and Housing revealed plans to initiate a housing construction program for the homeless, funded by petro.

Image credit: Petromoneda.net