“A comprehensive plan to restore the country’s financial stability” is something the Venezuelan President has in mind, as he said a few hours ago in a speech where he revealed new economic reforms for the country. In recent years, Venezuela has witnessed great economic backdrops leading to an inflationary spiral that is close to reach 1 million percent.
The Venezuelan government has tried to alleviate the financial crisis in the country and the scarcity of products with measures such as the insurance of “coupons” or food sales programs such as CLAP, where food items were sold at derisory prices compared to the traditional market. However, the fall of oil prices, sanctions promoted by the United States, strict exchange control and an excessive dependence on alternative industries without oil have added to the corruption in the country, which is now one of the highest at global levels.
Among the recent announcements made by the President, cryptocurrency plays a fundamental role to regulate inflation as well as internal and external controls. These announcements included the creation of a new currency “Sovereign Bolivar”, which will start to circulate on August 20 and will replace the legal tender Bolivar.
The most interesting fact about this new currency “Sovereign Bolivar” is that it will be ‘anchored’ by the cryptocurrency “Petro”. It is in fact, going to be tailored 1-to-1 to the price of a barrel of oil on the primary market and then be freely speculated on the secondary market. Then, the cryptocurrency would be a kind in which the price does not depend on a black market but on the price of a barrel of oil, which is the country’s primary export commodity.
According to the President, this step was necessary to revolutionise the economy of the country. And, for the crypto market, it is a new lead in a much novel way where a cryptocurrency could become the tool for an economic salvation.