It’s known for quite some while that Venezuela is currently undergoing one of the worst economic situations in the country’s history. Once more, news about the country’s economic state seems to be linked to its recently created cryptocurrency, the Petro.
In a recent announcement, President Nicolás Maduro displayed optimism and confidence in regards to the Petro and stated that “the petro is going to undoubtedly make one of the stabilizing columns of the Venezuelan economy.”
Faith in the Petro
Even though the Petro is not one of the most valuable cryptocurrencies out there, Petro could help Venezuela’s economy. The cryptocurrency is directly tied to the value of oil, Venezuela’s best resource.
According to various recent reports, the Venezuelan inflation rate could very well exceed 1 million percent by the end of the year. The Venezuela government plans to set in motion a program designed to address hyperinflation. The Economic Prosperity Recovery Program is set to begin August 20.
The country’s new cryptocurrency-backed national currency will start circulating at the same time, as reported by Telesur.
President Maduro is reported to have signed a decree to remove all taxes on import raw goods. The Venezuelan government will also issue paper money with fewer zeroes than the existing bills. Maduro believes that these measures can help with pressing matters such as the shortage of cash, and inflation, as well as the ever-increasing lines at ATMs which have become very common in Venezuela.
Both anti-inflation measures and the Pedro are seen with skepticisms
These measures, as well as the cryptocurrency’s ties to the national Bolivar, have seen a fair share of criticism from some financial experts. The economist Angel Alvarado spoke against these measures and declared for CNBC that “taking zeroes off the money doesn’t fix a thing.”
Petro is also quite controversial inside Venezuela. Representatives from Maduro’s opposing parties have even declared the cryptocurrency illegal and that it won’t stand after the current president is set to leave office.