Venezuela has been known to try new things. A new currency is now one of them! They are launching a new fiat currency that is tied to cryptocurrency, that is tied to oil. That is quite the extraordinary use of crypto. It is said Venezuela’s economic “reconversion” is set to start on August 20th of this year, where they will issue the “Sovereign Bolivar”.
Since the 2014 oil price collapse, Venezuela has not been able to handle the demand of oil resources, causing their economy to inflate. This planned economic reconversion and adoption of a new staple currency for Venezuela is said to have been put in place to prevent their inflation rate from hitting 1,000,000%, a number expected to be reached this year. The International Monetary Fund (IMF) claims Venezuela’s inflation will be on par with Zimbabwe’s inflation rate in the 2000s.
Minimum wage in Venezuela is around $1 per month.. something obviously not sustainable. There is currently an economic crisis that is sitting in the spotlight of the world. Is cryptocurrency the right choice?
Maduro’s Bolivar Soberano said in his own words the reason for this new currency, is to “stabilize and change the monetary and financial life of the country in a radical manner”. It seems he is very passionate about saving his country from the struggle and turmoil currently there, and ahead of them.
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