Venezuela’s Worsening Economic Crisis Sees Cryptocurrency Bring in High Demand Involvement

Worsening Crisis For Venezuela’s Economic Brings High Demand For Cryptocurrency Involvement

Venezuela has been suffering in its economy for quite a while, and things just seem to keep getting worse. Some of their citizens are even leaving to find a better and more reliable source of income. However, those who have decided to stay are using cryptocurrency to keep their head above water.

Last week alone, Venezuelans decided to trade close to 300 million bolivars, though the current traffic that consumers in the area are taking on leads experts to believe this new record could easily break. So far, even though the week is still early, they have reached 295 million bolivars worth of crypto traded already. The trend has been continuing for the better part of a year.

The socialist country has lost about 1.6 million citizens within the last three years, as they leave by foot and even by bus. Based on the information gathered by the International Organization for Migration, the number is rising, and most of the citizens are staying within South America, moving over to Peru, Brazil, Argentina, and Colombia.

Along with the demand to bring in more Bitcoins, one of the reasons that the industry has seen a surge in the use of cryptocurrency has been due to the devaluation that the bolivar has recently gone through. On August 10^th, inflation rose so high that there were five zeros removed from the currency. Still, the inflation rate continues to rise, despite the young age of the new currency.

The President of Venezuela, Nicolas Maduro, said that the local currency would be linked up with the Petrol token. This seems to be an effort to avoid new agreements for the currency and get into international finance, along with the attempts to control the hyperinflation.

Locals are skeptical about the adoption of Petro tokens as an official cryptocurrency for the country, debating whether it is even a real option. Even with the concern, the government has continued to work on advertising the cryptocurrency, issuing a decree that it will be the official currency of local oil company Petróleos de Venezuela, S.A. (PDVSA).

In a statement from Maduro, he said, “As of next Monday, Venezuela will have a second accounting unit based on the price, the value of the petro,” Maduro remarked on national television. “It will be a second accounting unit of the Republic and will begin operations as a mandatory accounting unit of our PDVSA oil industry.”