Venezuela is among countries that have benefitted from cryptocurrencies. Bitcoin was essentially designed right after the 2008 economic crisis. With its underlying blockchain technology, Satoshi Nakamoto wanted to create a currency that isn’t tied to one country’s economy. But things have evolved from 2008 to now. Less than ten years down the road since Bitcoin’s inception, countries that are facing economic problems are now looking to utilize the technology. There are those that even made their own cryptocurrency, among which is Iran and Venezuela.
Venezuela is currently suffering from hyperinflation. The economy has been struggling and its current currency has been devaluating in such an unprecedented rate. It is even expected by experts that Venezuela’s inflation rate could reach one million percent.
Petro was designed as a cryptocurrency that is said to be backed by barrels of oil. The reason for creating Petro is to bypass US sanctions. In fact, it has even been used to back a new national currency. And it doesn’t actually end there.
It has been announced on October 5 that Petro is going to be used to pay for passport fees. On October 8, it has been announced by Vice President Delcy Rodiguez that the fees that will be used to pay for passport applications will only be Petro. It is going to be 2 petros for a new passport and 1 petro for an extension. Unfortunately, the proposed rate of the passport fee is not exactly matched to the buying power of Venezuelans. The average monthly minimum wage in Venezuela is four times less than the proposed passport fee.
According to Rodriguez, for those Venezuelans that are living abroad, “Until the first day of November the cost will be $200 for issuance and $100 for extensions”.
A Copy of Dash?
The Petro as a crypto solution for Venezuela’s economic crisis has been faced with a number of controversies. One, there are those that claim that Petro is a scam. There are claims that the barrels of oil are nowhere to be found. And two, there are accusations recently that the developers of Petro simply copied the whitepaper of Dash.
Dash is co-incidentally growing in popularity in the country. There are businesses in Venezuela that are now accepting Dash as payment.
5,000 Venezuelans Flee Daily
One of the things that made Venezuela ripe for cryptocurrencies is the fact that their currency loses its value fast. And for people to safeguard their assets, many are now relying on cryptocurrencies such as Dash. However, an effect of the economic problem faced by Venezuela today is that people are living the country. People are fleeing to neighboring countries such as Brazil and Colombia.
Along with the introduction of passport fees being paid via petro, there will also be a migration police force that is going to take a closer look at citizens in order to “preserve citizen security and migratory control”. According to Bloomberg, around 5,000 Venezuelan citizens leave the country each day.
Is it possible that Petro will be adopted by businesses? Also, will Petro be used by other countries when it comes to transacting with Venezuela?