Financially troubled Venezuela, which is introducing the new, denominated, crypto-anchored “sovereign bolivar” this week, is also the birthplace of a number of alternative coins beside the state-issued, oil-backed national cryptocurrency, El Petro. Crisis-hit Venezuelans are actually using some of them in real life, according to the local crypto community.
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El Petro in the Spotlight
Public attention is focused on the petro this week, with authorities in Caracas launching the country’s new and denominated bolívar soberano (sovereign bolivar) that has five zeros less than the bolívar fuerte – the current Venezuelan fiat which is going down in history as one of the world’s most depreciated and inflated currencies. What makes the occasion special is that the new bolivar is pegged to the petro – arguably the world’s first national cryptocurrency. From Monday, the two will coexist together and will remain the only two official units of account in the Bolivarian Republic after the old bolivar is phased out.
In a recent radio interview , the president of the Venezuelan Association of Cryptocurrencies “Asonacrip”, Jose Alvarez, spoke about cryptocurrencies in the light of the opportunities they present to his compatriots who have seen the purchasing power of their fiat money literary evaporate before their eyes. Mr. Alvarez claims there are successful developments beyond the petro in Venezuela. Besides bitcoin and the bolivar, Venezuelans have other alternatives at their disposal, and some of them actually already work, with real-life use cases, as the representative of the crypto community points out. They are both local and crypto, like the petro, but not government-issued, unlike the national cryptocurrency.
Meet Venezuela’s other coins.
Venezuela’s Private Cryptocurrencies
Beside these privately-issued cryptocurrencies and the state-emitted oil-backed petro, the government also had plans to create another coin – Petro Oro (petro gold), to be backed by precious metals like gold. In February, right after the launch of the petro, President Maduro announced authorities were preparing to issue the “even more powerful” Petro Oro as well. No details were provided as to whether the second national Venezuelan coin would be backed by the gold reserves of Banco Central de Venezuela or the country’s mineral deposits. Months later, the fate of the project remains unclear.
On August 20, Venezuela devalued the national fiat currency. The new, petro-pegged “sovereign bolivar” has five zeros less than the current “strong bolivar”. The monetary reform was announced as part of a package of measures to improve the socio-economic conditions in the country and restore government control over the economy. The minimum salary will be raised 60-fold to 0.5 PTR, or $30 USD a month, but VAT will jump from 12 to 16 percent. Maduro also vowed to restore the price ceiling mechanism which is supposed to allow authorities to limit inflation.
What do you think will happen with Venezuela’s private cryptocurrencies? Share your thoughts on the subject in the comments section below.
Images courtesy of Shutterstock, Binance, Adab Solutions.
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