To drink a cup of coffee in Venezuela, you need to spend 2 million (USDVEF). In order to solve the problem of inflation, the Venezuelan government seems to regard cryptocurrency as an alternative solution to the economic crisis.
OdailyinformationinformationIn addition, the Venezuelan government drafted a constitutional amendment to the cryptocurrency central bank that also wants to establish a separate digital currency court, which will be higher than the Supreme Court.
Venezuela's actions in the field of encryption have been frequent and advanced.
In order to avoid the financial blockade imposed by the United States, Venezuela, which is rich in oil resources, officially began to pre-sell the "Petro Coin" issued by the country on February 20 this year, marking the first legal digital currency issued by a country in human history.
Unlike general digital currencies, the Venezuelan petro is based on natural resources. According to its white paper, the total circulation of petro coins is 100 million, and the reference price of issuance is 60 US dollars. Each petro coin is equivalent to 1 barrel of oil, but it cannot be directly exchanged for oil. Petro coins do not need to be "mined" by consuming computer computing power and a large amount of electricity. All petro coins are pre-created and issued and directly sold by the Venezuelan government, similar to the public offering of stocks in the primary market.
Starting in April, petro can be traded in the secondary market on Venezuelan domestic and international cryptocurrency exchanges. At the end of April, Venezuelan President Maduro announced the authorization of 16 cryptocurrency exchange licenses in the country to facilitate Petro transactions in the international market.
In order to promote the circulation of petro coins, in May this year, Maduro signed a presidential decree, planning to establish a "use of petro as currency" on the tax-free Margarita Island (Margarita Island), located in the northeast of Nueva Esparta state. A special economic zone for purchasing currency for transactions within the duty-free zone."
At the same time, the Venezuelan government has also launched a "cryptocurrency mining farm" plan, hoping to attract at least 1 million students to participate in mining.
Even the establishment of the cryptocurrency central bank and the cryptocurrency court later hoped to help Venezuela overcome economic difficulties in this way, and promote the international financial order and exchanges between emerging economies. But this doesn't seem to have the desired effect. The Venezuelan fiat currency, the bolivar (VEB), has been depreciating despite efforts by the government to sell the digital currency Petro, but it has not reversed the economic downturn.
The United States publicly stated that the petro currency is an extension of Venezuelan government bonds and is still within the scope of sanctions. This has a negative impact on the international circulation of petro coins. India has also previously refused to accept the petro for transactions.
Lars Peter Hansen, a Nobel laureate in economics, also said in an interview that he is not optimistic about the oil currency. He said that the devaluation of the Venezuelan legal currency has been very severe, and the "petro currency" is not a good way to hedge risks. If a country cannot stabilize its own sovereign currency, then it cannot guarantee that it can stabilize the digital currency it issues. Legal currency can be spammed off the chain, and digital currency can be spammed on the chain.
It can be seen that the road to Venezuela’s sovereign cryptocurrency is still long, but as a great social experiment, it has pioneered the use of cryptocurrency as a legal currency, including the establishment of cryptocurrency banks and courts. For some small countries with economic depression , is of reference significance.
