Due to the collapsed economy, the President of Venezuela, Nicolas Maduro declared the initiation of “Petro”, a digital form of currency backed by oil reserves. Looking into the domain of digitalized currency, this was announced to get around the US led economic transactions to boost up the struggling economy.
A leftist leader, the President put forward only a small number of particulars about the currency launch or how the struggling OPEC (Organisation of the Petroleum Exporting Countries) member would pull off such an accomplishment, but he affirmed to applause that “the 21st century has arrived!”
According to the President’s regular Sunday televised broadcast, he announced that the country will generate a cryptocurrency supported by the natural reserves of oil, gas, gold, and diamond.
Rise above the fiscal obstruction
This currency will help Venezuela, as a country move forward in terms of financial sovereignty as well as to make monetary transactions and rise above the fiscal obstruction.
However, this announcement did not sit well with the opposition leaders, who claimed that the approval of the Congress was fundamental and as the country is in the midst of unrest, they weren’t sure if the currency would actually be created and see the light of day.
The actual currency, the bolivar, is plummeting, and the country is very much deficient in basic requirements such as food and medicine.
Permits and sanctions
Even so, the statement shows how permits and sanctions enacted this year by U.S. President Donald Trump’s administration are hurting Venezuela’s ability to shift money through international banks.
Washington has charged sanctions against Venezuelan officials, PDVSA (Petróleos de Venezuela, S.A) senior managers and the country’s balance due to issuance.
According to several sources, compliance departments are examining dealings associated to Venezuela, which have dawdled some bond expenses and convoluted certain oil exports.
Impressive rise of bitcoin
Maduro’s turn away from the U.S. dollar comes after the current impressive rise of bitcoin, which has been fueled by signs that the digital currency is gradually gaining grip in the conventional investment domain.
Since cryptocurrencies are usually not supported by governments or even central banks, it came as a surprise to supporters when the President announced this. What is ironic is that the bitcoin value has decreased among its Venezuelan investors and buyers due to the control of currency in the country.
And what more, Maduro’s government has had an extremely poor track record in economic policy.
Unwarranted money printing
Due to unwarranted money printing and currency controls, the bolivar has dipped more than half percent against the US dollar in the black market.
And the millions of homeless citizens struggling to make ends meet, the announcement isn’t providing an immediate relief anytime soon.
The president, a former bus driver as well as a union leader, isn’t meeting the demands of his people due to his irresponsible refusal to repair Venezuela’s reins and curtail the economic meltdown.
According to opposition lawmakers and economists, the President’s plans have no integrity and some people do not even see a future with this.
