As Venezuela continues to struggle with hyperinflation, the central bank of Venezuela has announced a new digital currency. Venezuela’s president, Nicolas Maduro, announced the creation of the new digital currency, the ‘Bolivar Digital,’ on the 7th July, 2018. Although details of the new digital currency have not been released, Maduro claims that the currency would be backed by the Venezuelan government’s gold reserves and that the government would give every citizen access to the digital currency.
The CBDC is an innovative and technologically advanced digital currency prototype developed for use as a digital currency in Venezuela. In a country where inflation is rampant and the bolivar is in hyperinflation, the CBDC aims to offer the Venezuelan people a stable, secure and digital alternative for the current bolivar.
Over the past few years, the Venezuelan central bank has been issuing a cryptocurrency called the Petro, which it aims to use to circumvent US sanctions. But the Petro has been controversial, with many in Venezuela believing that it lacks any value in the real world. By launching a digital version of the Petro, the CBDC will allow the government to circumvent US sanctions and allow it to fund its public sector projects.
In 2018, Venezuela created the Petro using Blockchain technology. • In October, the digital Bolivar will be introduced, based on electronic payments through text message.
Cryptocurrencies produced by banks across the globe have becoming more popular, with some governments leading the charge. Venezuela has decided to join this group of nations, announcing the introduction of the digital Bolivar by its central bank.
The bank intends to establish a CBDC by October 2023, allowing it to participate in the new global financial systems. All of these details were revealed by Venezuela’s vice president of technology and communication on Twitter.
In order to balance the national economy, the South American country will undergo a fresh monetary reconversion, according to the statement. The Venezuelan government is attempting to remove six zeros from the Bolivar, the country’s currency, at this time.
The virtual Bolivar has arrived in Venezuela and is attempting to establish itself as a cryptocurrency.
Venezuela has announced the introduction of the digital Bolivar into circulation. The central bank will also print banknotes in denominations of 5, 10, 20, and 100 Bolvares.
Under the CBDC plan, a text-messaging-based exchange will support the Digital Bolivar. Citizens in the nation will be able to make transactions and payments for various services more rapidly as a result of this.
This new economic paradigm, according to the banking authorities, will have no impact on the value of the national currency. The CBDC aims to establish a basic currency range that businesses can utilize without difficulty.
The use of cryptocurrency in other Latin American countries
Although Venezuela’s introduction of a digital Bolivar seems to be a first, it is not the first time the country has experimented with cryptocurrency. The national authorities established crypto-based pricing for a barrel of oil known as “Petro” in 2018. The cryptocurrency got over the restrictions set by the US government.
Petro, on the other hand, was a disaster because it lacked a scalable blockchain and instead exploited it. The national government has insisted that the Petro is a cryptocurrency with a future, but in fact, it is seen as a scam.
The Venezuelan administration is frantically attempting to decrease the country’s current hyperinflation. The Latin American nation is in the midst of an economic catastrophe, with inflation expected to reach 2,500 percent in 2023.
With the facts in hand, the introduction of the new digital Bolivar may be yet another disaster in Venezuelan history. This may lead to a greater aversion to cryptocurrency among the country’s people.
Venezuela’s government has made no attempt to control cryptocurrencies, preferring instead to depend on them. Venezuelans escape inflation by using Bitcoin and USDT transactions.
Uruguay, on the other hand, has developed a fantastic cryptocurrency bill that will be in circulation by September. El Salvador’s government likewise accepts Bitcoin payments and has stepped up its efforts to develop a unique financial architecture.
The Venezuelan Central Bank (BCV) has announced it will start to implement a new digital currency called BsCBDC (“Bs” stands for “digital”). The BsCBDC will be an e-currency similar to Bitcoin. The Bitcoin infrastructure is open source and peer-to-peer, but, unlike Bitcoin, the BsCBDC will be issued and controlled by the Venezuelan authorities.. Read more about venezuela cryptocurrency sanctions and let us know what you think.