Venezuela has adopted cryptocurrency as their native currency, with Nicolas Maduro, Venezuelan President tying Venezuelan Currency to the oil-backed cryptocurrency Petro.
President Maduro made the announcement last week regarding these changes and have followed it through this weekend. Following the Fiscal Changes, The Central Bank of Venezuela devalued the nation’s currency by 95%, result of ongoing hyperinflation of Venezuelan currency, Bolivar. This new currency would be named as “sovereign bolivar,” backed by to the oil-backed cryptocurrency, Petro, an ERC-20 token, that Maduro had launched earlier this year.
Historical Event But Amidst Poor Conditions
This recent Switch by Venezuela to a cryptocurrency-pegged currency is the first time in history for a nation to accept crypto at such a level. Although, leading economists in the country warned against the devaluation fearing it might worsen the inflation which is already on the lines of absurdity i.e. at the range of 108,000%, as per a report by Bloomberg.
Venezuelans have been liquidating their bolivars into Bitcoin already, since this year in light of the government ban. The current financial crisis of the country which is closer to humanitarian crisis has compelled it’s population to flee.
Though the ambient conditions of the news isn’t much positive, President Maduro seems to follow his promise over substantial economic changes while the result awaits for the world to watch.
The Petro switch seems to be distant from the solution for the Venezuelan economic crisis, since the economy still leers towards collapse. The current move by Maduro seems to be his last move towards regaining political power. Maduro also escaped an assassination attempt b a drone while making a speech, earlier in August.
All the Banks and ATMs have been rendered non operative in order to facilitate the new currency change and applied rules.