The president of Venezuela, Nicolas Maduro, says that the country’s government is now looking at diverse cryptocurrencies as a potential way of avoiding sanctions.
On Sept. 29, Maduro presented a new bill that intends to help the country overcome the impact of United States sanctions.
As part of the bill, Venezuela will study the possibility of using various cryptocurrencies in both domestic and foreign trade. Maduro claimed that the new anti-sanctions bill involves both private and state-backed crypto initiatives like Venezuela’s oil-pegged cryptocurrency, the Petro:
“The anti-sanctions bill is the first response […] to give new strength to the use of Petro and other cryptocurrencies, national and global, in domestic and foreign trade, so that all cryptocurrencies of the world, state and private, could be used. This is an important project that is under development.”
According to online reports, the new bill is now being reviewed by Venezuela’s legislative body, the National Constituent Assembly.
The latest news apparently demonstrates that Venezuela’s crypto interest is not limited to the country’s national cryptocurrency, the Petro, which has been positioned as a major tool to evade U.S. sanctions.
Maduro’s new claims came shortly after Venezuela’s government issued an official regulatory framework for mining of cryptocurrencies like Bitcoin (BTC). On Sept. 23, Venezuela’s National Superintendency of Crypto Assets and Related Activities issued the first decree to regulate all crypto mining activities, outlining specific requirements for miners such as an obligation to join the so-called “national mining pool.”
As Cointelegraph previously reported, Maduro used to support no cryptos other than the state Petro.
In late 2019, Maduro announced that the country’s retirees and pensioners will be paid their Christmas bonuses in Petro. The Venezuelan government reportedly turned pensioners’ monthly bonus into the Petro in late 2018.
Officially rolled out in February 2018, the Petro became the world’s first national oil-baked cryptocurrency. The coin is purportedly designed to attract foreign investment as well as avoid sanctions by the U.S. government. However, the token is not available for purchase anywhere outside of Venezuela.
Venezuela Trials ‘Decentralized Stock Exchange’ That’s Open To The World
Venezuela has announced a 90-day trial for a decentralized stock exchange supporting “alternative digital assets” and fiat currencies.
Venezuela’s National Securities Superintendency has given the go-ahead for a 90-day pilot of a crypto-powered “decentralized stock exchange” in the country that aims to have a global reach despite international sanctions.
Cointelegraph Espanol reports that news of the Decentralized Stock Exchange of Venezuela’s authorization to operate was published in the country’s official gazette, issue 6,578, Sept. 29.
The exchange is known as BDVE and its website claims that the platform comprises “the first decentralized stock exchange in the world.” It highlights that users will be able to access the exchange “from anywhere in the world” and “without restrictions.” Both fiat currencies and “alternative digital assets” will be traded on BDVE.
“[BDVE] represents a new and innovative segment of the stock market, which, with the use of new information and communication technologies, provides the investor with security and control over its financial assets.”
The local securities watchdog will determine whether the exchange will be granted a license to continue trading after the 90-day trial is over.
The platform’s operating manual notes that the securities traded on the platform will comprise ERC-223 or ERC-721 tokens, or a third “packable” token. While the document does not contain the word Ethereum, use of the popular Ethereum (ETH) token standards suggests that the platform may be built on Ethereum.
Surprisingly, the manual does not mention whether Venezuela’s oil-backed national cryptocurrency El Petro will be utilized by the exchange.
Venezuelan President Nicolas Maduro announced on the same day a new “anti-sanctions bill” intended to mitigate the impact of economic sanctions imposed by the United States.
The bill, which is currently being reviewed by Venezuela’s National Constituent Assembly, noted that both private and state-backed crypto assets could be used to conduct trade beyond the reach of U.S. sanctions.
Venezuelan Army Starts Mining Bitcoin To Make Ends Meet
The Venezuelan army turns to crypto mining as the country’s economy collapses.
The regime of Nicolás Maduro continues to lean on crypto to keep economically solvent.
Via Instagram, an engineering brigade of the Venezuelan army inaugurated the new “Digital Assets Production Center of the Bolivarian Army of Venezuela.” As the video shows, the center houses various ASIC mining equipment used to crack proof-of-work algorithms.
General Lenin Herrera presented the new mining operation. The stated goal of the mining operation is “strengthening and self-sustainability of our units of the Bolivarian Army,” adding later that these mining centers would be generating “unblockable sources of income” and an alternative to the “trust system blocked and controlled by colonialist interests,” referring to the United States, a country that has leveled sanctions against many associates of the Maduro regime.
With oil prices crashing and political turmoil taking its toll even before COVID-19, Venezuela has seen historic inflation in recent months.
As Cointelegraph reported in September, Maduro proposed an “Anti-Blocks Law,” a legal body that proposes using cryptocurrencies to evade sanctions and access financing from international allies.
These intentions are not new. The Maduro administration has gone so far as to launch and promote its own cryptocurrency, the Petro, which has seen limited success.
On the flip side, the U.S. military is also closely observing Venezuela’s crypto activities. Recently, Admiral Craig Stephen Faller referred to Maduro’s use of crypto and went so far as to link its use to drug trafficking and terrorism, adding that the armed forces were keeping an eye on all such operations.
Venezuela Ramps Up Bitcoin Payments For Imports From Iran And Turkey
Venezuela President Nicolás Maduro claims the country will “use all the cryptocurrencies in the world” to bypass U.S. sanctions.
According to an investigative report from RunRun.es, Venezuela intends to increase its use of Bitcoin to pay for imports to bypass financial sanctions imposed by the United States.
RunRun.es, which was founded by Venezuelan investigative journalist Nelson Bocaranda, cited anonymous sources from the country’s central bank who claim that “payments to companies from allied countries such as Iran and Turkey have been made using Bitcoin.”
It is unclear, what these imports consist of, however, Turkey and Iran currently provide the country food and fuel in exchange for gold.
Venezuela President Nicolás Maduro’s government has promoted its state-issued, purportedly oil-backed ‘Petro’ cryptocurrency as a means of exchange both internationally and domestically since launching the token in 2018. However poor adoption of the Petro has forced the regime to explore other crypto assets including Bitcoin and Ethereum.
Maduro began to publicly threaten the use of Bitcoin and other crypto assets as a means to bypass sanctions in September, proclaiming his administration would soon “use all the cryptocurrencies in the world, public, state, or private, for internal and external trade.”
On Oct. 8, Venezuela’s National Assembly passed the Anti-Blockade Law, granting further executive powers to circumvent sanctions imposed on the country, including to authorize the creation or use of any crypto asset as a monetary instrument.
The Venezuelan government established its “Digital Assets Production Center”, a Bitcoin mining warehouse in November, as the country increased its reliance on cryptocurrencies.
Last week the Venezuelan government launched its cryptocurrency exchange, backed by the National Cryptoactive Superintendency, to allow citizens to exchange Bolivars for Bitcoin.
Iran has also put into action a law to use Bitcoin to pay for imports, in an effort to reduce pressure on the country’s already fragile economy.
Mexico Inflation Surges Beyond Ceiling Ahead of Rate Meeting
A sharp spike in Mexico’s inflation is leading economists to change their bets ahead of Thursday’s central bank monetary policy decision, after they had earlier predicted a rate cut.
Consumer prices in the first two weeks of March increased 4.12% from the same period a year earlier, up from 3.68% in late February, the national statistics institute reported on its website Wednesday. The figure, boosted by fuel prices, came in above the 3.9% median estimate of analysts surveyed by Bloomberg.
Nearly half of the 23 economists surveyed by Bloomberg News before the inflation print were expecting the central bank, known as Banxico, to cut rates for a 13th time since August 2019.
“It seems very difficult for them to cut now,” said Janneth Quiroz Zamora, an economist at Monex Casa de Bolsa who had predicted a quarter-point cut. Barclays Plc and Pantheon Macroeconomics both also changed their calls from a small cut to a hold.
Mexico’s swap curve steepened sharply after Wednesday’s inflation numbers. Traders now price about 80 basis points in rate hikes by the end of the year.
Banxico unanimously voted to resume its easing cycle in February, cutting interest rates by a quarter of a percentage point. Mexico’s economy shrank 8.2% last year, the most in almost a century, and the bank’s easing has provided the only substantial form of economic stimulus during the crisis.
Core prices, which exclude volatile items like fuel, rose to 4.09% versus the previous year and climbed 0.35% compared to February, above expectations of 0.2%.
The central bank targets inflation at 3%, plus or minus 1 percentage point.
The bank could still cut again in the second half of the year if inflation comes under control and the Federal Reserve maintains expectations that it won’t hike its own rate until 2023, said Marco Oviedo, chief Latin America Economist at Barclays.
Fuel prices led the gains in the inflation index, rising 9.45% year-on-year. Cooking gas prices rose 4.05% versus February.
Exploring Venezuela’s Crypto Ecosystem Since The Start Of The Pandemic
Here are the events that marked the past year in the Venezuelan crypto space and the opinions of those who experienced them from the inside.
In the year since the COVID-19 pandemic first disrupted almost every aspect of our lives, many things have happened within the crypto ecosystem around the world. So, what has the past year been like for crypto in Venezuela?
Even before 2020, Venezuela already had a number of businesses that accepted various cryptocurrencies as payment; however, considerably more have moved to adopt this form of payment over the past year.
This includes everything from the hotel sector to famous pizza chain Pizza Hut announcing that it will accept Bitcoin (BTC), Litecoin (LTC), Dash and other cryptocurrencies as a form of payment.
Halfway through 2020, crypto exchange Cryptobuyer and payments processor Mega Soft announced that they would form an alliance to allow some 20,000 merchants that use their services to accept payments in crypto through the Cryptobuyer Pay solution developed by the exchange.
Another important landmark was in September 2020 when a Bitcoin node was connected to Blockstream’s satellite network — a first for Venezuela. The result of a joint effort between Cryptobuyer and crypto education provider AnibalCripto, the node was launched despite the logistical limitations imposed by COVID-19-related lockdown measures.
Likewise, those responsible for the node announced that this was the first step toward building a mesh network that would be able to process Bitcoin transactions without the need for an internet connection.
Despite the ongoing economic crisis in Venezuela, the crypto mining industry has been growing. According to the Cambridge Bitcoin Electricity Consumption Index, Venezuela contributes the most to the Bitcoin hash rate out of any nation in Latin America, which means that there is a substantial amount of computing power being generated in the country.
However, Venezuela introduced a new piece of legislation in September 2020 targeted at the country’s mining industry. In addition to the creation of an obligatory registry and the establishment of new taxes for those who work in mining-related sectors, the new law introduced the controversial “Pool de Minería Digital Nacional” (National Digital Mining Pool). Under this new requirement, it will be obligatory for miners to contribute their hashing power to a new, state-backed mining pool.
Overall, there is still no real clarity regarding the mining pool, which means that the way in which the law will be enforced is not really known, and it has not yet been revealed exactly how Venezuelan miners will have to participate.
Although it may seem paradoxical to see such a level of support for cryptocurrencies from a government that is often seen as being quite restrictive of its citizens and their freedoms, the past year has seen several crypto experiments, including plans to allow Venezuelans to pay for passports with Bitcoin using payments processor BTCPayServer.
However, even though the administration of President Nicolás Maduro did not end up implementing the passport plan, its vision for the use of crypto did not diminish. For example, Maduro proposed an anti-sanctions bill in September 2020, seeking to use cryptocurrencies to evade the various sanctions imposed on the country and hoping to boost crypto use in various business operations.
More specifically, there were reports that Maduro’s administration was using Bitcoin to facilitate trade between Iran and Turkey, two of the current main geopolitical allies of the state.
It was also reported in November 2020 that the Venezuelan Army decided to open the Centro de Producción de Activos Digitales del Ejército Bolivariano de Venezuela (Digital Assets Production Center of the Venezuelan Army), a center that houses ASIC mining equipment designed for proof-of-work cryptocurrencies in order to generate “unblockable” financial income, according to the military leaders who inaugurated the facility.
All this progress made on the part of the Venezuelan state in the crypto ecosystem has been to seek solutions to get around the sanctions that the United States has imposed on Maduro, his cabinet and high-ranking military officials.
However, U.S. authorities have declared that they are monitoring Venezuela’s cryptocurrency operations, and in June 2020, they even added its cryptocurrency superintendent — the highest authority on the regulation of the crypto ecosystem in Venezuela — to the U.S. Immigration and Customs Enforcement’s Most Wanted List.
Record Number Of Bolivars Locked Up In Bitcoin
The bullish surge of Bitcoin’s price has been coupled with the rapid devaluation of Venezuela’s fiat currency, which has resulted in a record number of bolivars being traded in for Bitcoin. In the first week of December 2020 alone, peer-to-peer exchange LocalBitcoins saw 5.85 billion bolivars exchanged on the platform. By the first week of February, this number had jumped to 8.56 billion bolivars.
The complicated political and economic situation in Venezuela has led the government to consider alternative solutions. In the midst of this scenario, blockchain technology and cryptocurrencies, in particular, have been brought to the fore.
Maduro is not the only one who sees cryptocurrency as a way out of troubled waters. One of his main opponents, Juan Guaidó — who is president of the National Assembly and recognized as Venezuela’s legitimate president by some 60 countries — has used the stablecoin USD Coin (USDC) to evade financial restrictions imposed by the Maduro administration in order to send humanitarian aid to Venezuelans.
The funds used by Guaidó came from assets that were seized by U.S. authorities from the U.S.-based bank accounts of Venezuelan state companies and various members of Maduro’s administration.
Opinions Within The Ecosystem
To understand better what it felt like on the ground within the crypto ecosystem in Venezuela, Cointelegraph en Español spoke with some of the main actors who were involved in the various events that set the tone during the past year.
Jorge Farias, CEO of Cryptobuyer, opined to Cointelegraph en Español that the use and adoption of crypto as a form of payment in Venezuela is becoming a reality: “The global and local situation has made it so that thanks to the pandemic, businesses and individuals are looking for payment alternatives that do not require the interaction or physical presence of people.”
Ernesto Contreras, head of business development at Dash Core Group, mentioned that Dash’s plans to expand to national chains was halted due to the spread of the pandemic. Additionally, during the lockdown period, “We saw how delivery offers grew, which work in a 100% digital environment, and several services like Dingo, Piido and others have joined in accepting Dash and cryptos.” He added further:
“Despite the immense difficulties that the Coronavirus has brought, the crypto ecosystem continued to reach great milestones in Venezuela during 2020, and this added to a global environment that is increasingly digital, and with a positive trend for cryptocurrencies in the world, has opened more doors of great importance for the growth, adoption and use of Dash and cryptos.”
Javier Bastardo, host of the Satoshi en Venezuela podcast, told Cointelegraph en Español that “Venezuela continues to be one of the most active p2p exchange markets.” However, he believes that the trend has not reached its peak just yet.
Moreover, he believes that FOMO — the fear of missing out — is not influencing the situation as much as in 2017 and that a steady inflow of people who heard about cryptocurrencies in the past are only now opting to enter the market. He also added that another factor that has dominated the past year has been the willingness to start paying directly in crypto, which ultimately delivers a sustained level of adoption.
Anibal Garrido, CEO AnibalCripto, told Cointelegraph en Español that “Venezuela has been part of important contributions to the development of the ecosystem.” He further added that:
“The difficult situation of COVID-19 has left us with a great learning experience: NOT to depend on physical presence for the harmonious development of our society.”
He added that the local mining law sets a precedent for other countries to evaluate and consider. He also mentioned the incorporation of crypto payments in retail chains along with the developments in providing fast, secure fiat-to-crypto exchange processes.
Mariangel Garcia, community manager for Binance Spanish, believes that “Venezuelans were shaken out of our comfort zone, businesses were forced to start a digital transformation and now many users can see how options abound that before this situation did not exist.”
She further told Cointelegraph en Español that this translated into the widespread adoption of Binance’s native cryptocurrencies in the country, as well as a surge in demand for its peer-to-peer platform. For Garcia, this means that “Thousands of Venezuelans have found financial freedom in our products without limitations.”
She concluded by saying that: “Venezuela is the only country in Latin America with an inclusive vision towards the adoption of cryptos, which is a good start.”
Food Markets In Caracas Empty Out As Inflation Hits The Poorest
In a country suffering what’s considered the Western Hemisphere’s worst humanitarian crisis, Venezuela’s pain is hitting a new order of magnitude as the food markets of Caracas turn into ghost towns.
At Guaicaipuro, near downtown, the long hallways of stalls seem to stretch endlessly with hardly a shopper in sight. At Quinta Crespo, food sellers are desperate to attract attention, screaming over each other every time someone walks by.
At San Martin market, on the city’s west side, some stalls are shuttered, while some have so little food, they might as well have also closed. Others have decent supplies, but high price tags mean would-be customers mostly just walk away. Business is so scant some hawkers can’t even be bothered — they just sit at their posts, playing on their phones, with no expectations for the day.
Even as there are emerging signs that Venezuela’s economy may finally have hit bottom, the green shoots come on top of decades of a swelling gap between rich and poor that still leaves millions in the country extremely vulnerable. The empty markets of Caracas are one of the stunning examples of that gap, as access to fresh and affordable food gets squeezed.
There’s no dearth of causes behind rampant food inflation in the country, but the most acute issue now are fuel shortages that have deepened the problems.
In Venezuela, home to the world’s largest oil reserves, fuel scarcity has gotten so acute it’s crippled the economy, forced factories to shut and left drivers lining up for hours to fill up their tanks. The tightening vice of U.S. sanctions has strangled what supplies come in from abroad, and now a lack of diesel is snarling just about every aspect of the food-supply chain.
Farmers don’t have enough fuel to use the machinery they need to plant and tend to crops. What little is grown in the far-west Andean region, the heart of production, then has to get trucked some 12 hours or more to the capital city. Fuel is so expensive that transportation costs alone can push up the price of greens by 200%, said Gerson Pabon, director of Fedeagro, a large food producers’ association.
Venezuela On Brink Of Famine With Fuel Too Scarce To Sow Crops
By the time shipments of spinach or potatoes reach stalls like the one run at Quinta Crespo market by Roberto Fernandez, prices are so high that his customers can hardly afford to eat.
“People used to buy by the kilo. Now, they take just two, three items,” Fernandez said, adding that his sales have been cut in half this year. “The drop in consumption is masking the lower supply of food.”
Adding to the pain is the the ad hoc dollarization of the local economy. While that’s nominally helped to keep inflation in check, it’s of little relief to the country’s poorest who primarily have access to the bolivar, which has continued its massive spiral lower.
The country’s Oil Ministry and the Food Ministry didn’t reply to requests for comment sent through the Information Ministry.
A kilogram (2.2 pounds) of tomatoes can fetch $1.50. Potatoes and carrots are about the same, while peppers can reach almost $2. That’s a tremendous cost when you consider that an average worker makes around $55.50 a month, according to a February report by local analysis firm Anova, sponsored by the Inter-American Development Bank. Meanwhile retirees, common customers at the municipal food markets, receive a monthly pension equivalent to less than $3.
Seven years of economic collapse have sent Venezuela down a painful path of dysfunction and disarray. Hunger is so pervasive in this once wealthy nation that the country has been teetering on the brink of full-fledged famine, the United Nations’ World Food Programme has warned. The fallout from Covid-19 has likely pushed the problem well beyond the levels of 2019, when about 9.3 million Venezuelans didn’t have enough to eat, according to the group.
From 172 To 115 Pounds, Venezuelan Hunger Up Close And Personal
Until now, Caracas was often shielded from the worst of the crisis. The capital city’s markets were like small islands of respite, supplying the poor and working class with fresh produce, meat and dairy. Now that last sanctuary of relief is disappearing amid spiraling food inflation.
Marisol Mendez spent a recent Wednesday morning at San Martin market in search of vegetables. As the economy became dollarized over the past year, her salary, a mix of greenbacks and bolivars, has bought her less and less at the market where she’s shopped for 28 years. She used to buy tomatoes and potatoes, 2 kilograms at a time. Now she’s lucky if she comes home with even half a kilo. On this day, she was leaving empty-handed.
“I practically gave up meat, deli, and dairy. I buy much less vegetables. The vegetables are expensive here,” said Mendez, a 60-year-old manager at a food-distribution company that supplies some of the market’s stalls.
Instead of fresh food, many Caraquenos are instead relying on a mix of carbs and processed food to stave off hunger.
“The Venezuelan’s diet is very monotonous,” said Marianella Herrera, a nutritionist and professor at the Central University’s Center of Development Studies.
“We are creating a breeding ground for chronic diseases such as diabetes, heart conditions, poverty-related obesity and food insecurity, even some types of cancer.”
Of course, the picture is different for the wealthy, who often earn in dollars or receive remittances from family abroad. The city’s richest and plugged in can visit upscale food stores where the shelves are packed — and they also find ways to fill their tanks.
But for the poor, food inflation hits hard. In just the month of May, food costs surged 22%, while prices for fruits and vegetables saw a 31% increase, according to Caracas research group Cenda. Still, even price acceleration at that level is down from what was seen in the past. A year earlier, food costs had surged almost 30%, while in May 2018 they were up 84% from the previous month.
In a recent rare interview, Tareck El Aissami, Venezuela’s oil minister, said fuel lines will disappear as the country’s crude output quadruples by year-end. But that vision is so optimistic that it strains credulity, especially as the country faces some the toughest economic sanctions ever imposed.
The diesel shortages mean food output in the Andean region has dropped 85% this year, according to Pabon of Fedeagro. The trucks that transport what is produced are typically forced to pay for fuel on the black market, where carriers are often shelling out $3 for a liter ($11 a gallon). That cost becomes even more enormous when you try to calculate in bolivars.
“Suppliers at the wholesale market say they pay for diesel in U.S. dollars, so they charge us in dollars,” said 68-year-old Luisa Hidalgo, who runs a food stall at San Martin market. Her wares have been reduced to mostly plantains and sweet chili peppers. But it could be worse.
“We don’t get many dollars in this part of the city,” she said. “That’s why my neighbor closed. He couldn’t afford to restock.”
Venezuela To Launch CBDC In October — And Cut Six Zeros From Its Currency
The Central Bank of Venezuela is rolling out a CBDC in October and will launch an SMS-based exchange system to facilitate its use.
The Central Bank of Venezuela will launch a central bank digital currency (CBDC) in October alongside a monetary redenomination that will cut six zeros from the currency due to raging inflation.
As of Oct. 1, the digital Venezuelan bolivar will begin circulation in the economy. Its cash equivalent will get a new 1-bolivar coin, along with banknotes ranging from 5 bolivars to 100 bolivars as part of the six-zero readjustment of the currency.
The Central Bank of Venezuela made the announcement on Friday. The CBDC will be accompanied by an SMS-based exchange system to facilitate payments and transfers among its users. The bank claimed that the CBDC and redenomination of the currency will have no effect on the bolivar’s value and that the overhaul is part of a move to simplify the use of the currency.
“The bolivar will not be worth any more or any less, in order to facilitate its use, it is being taken to a simpler monetary scale,” the central bank said.
— Banco Central de Venezuela (@BCV_ORG_VE) August 5, 2021
Venezuelan President Nicolás Maduro first teased the idea of a digital bolivar back in February as he outlined the issuance of CBDC as one of the actions the government was taking to modernize and rebuild the economy.
The president is no stranger to state-issued digital currencies, having launched the oil-pegged Petro coin in 2018 as a tool to circumvent United States sanctions.
This is the second time in three years that Venezuela has readjusted the bolivar after Maduro cut five zeros from the currency in 2018 as inflation hit its peak of 1.8 million percent. In 2020, the annual inflation rate was estimated to be around 2,300%.
Luis Vicente León, economist and president of Caracas-based Datanalisis, criticized the move, telling Bloomberg on Thursday that another redenomination of the currency will do nothing to address the underlying issues that are debasing its value:
“Removing those zeros does not solve, at all, the reason that originated the problem. Without resolving the root of the issue, we will have the same problem in months.”
Venezuela has been dealing with a long-running economic crisis as the economy suffers from U.S. sanctions and hyperinflation. In September 2020, Maduro proposed an anti-sanctions bill that sought to use crypto as a tool to evade the sanctions imposed on the country.
President Nicolas Maduro’s government has vowed to protect the use of the bolivar even as it has allowed widespread adoption of the U.S. dollar, a move intended to quell hyperinflation that has been in place since at least 2017 and ease shortages in stores. Bloomberg’s Cafe con Leche index, a measure of inflation, has registered a 2,575% rise over the past year. Although the dollar is preferred by most in the country, bolivars are needed for everyday transactions, like bus fares and to pay at gas stations that receive government subsidies.
Dropping zeros may temporarily make transactions easier, but it will not address underlying causes of instability, including mistrust in the currency and massive public spending that’s not backed by local production, said Luis Vicente Leon, an economist and president of Caracas-based Datanalisis
“Removing those zeros does not solve, at all, the reason that originated the problem,” he said. “Without resolving the root of the issue, we will have the same problem in months.”
The government has made similar adjustments to the bolivar before, having cut eight zeros since 2008, not including Thursday’s decision. Still, inflation and depreciation have eroded its purchasing power, forcing individuals and businesses to engage in complex operations to carry out simple transactions, as accounting and payment systems collapse from the overflow of digits.
While it will print physical money, including a 1-bolivar coin and new bills of 5 to 100 bolivars, the central bank is encouraging use of the digital bolivar, it said. The largest bill will be worth roughly $25 under the current official exchange rate.
Venezuelan International Airport To Accept Bitcoin Payments
“We must advance in these new economic and technological systems to be accessible,” Maiquetia airport director said.
A major international airport in Venezuela is reportedly preparing to start accepting cryptocurrencies like Bitcoin (BTC) as payment for tickets and other services.
Simón Bolívar International Airport is working to enable cryptocurrency payments to comply with local industry standards, regional news agency El Siglo reported on Sunday. Also known as Maiquetia, the airport is located in downtown Caracas, the capital of Venezuela.
According to Maiquetia airport director Freddy Borges, the airport plans to accept many cryptocurrencies, including Bitcoin, Dash and Venezuela’s oil-pegged digital currency, the Petro. He said that the airport’s administration would introduce new payment options in coordination with Venezuela’s National Superintendence of Crypto Assets and Related Activities.
The introduction of crypto payments at the Maiquetia airport would mark the company’s commitment to advance toward international standards and drive digital currency adoption, Borges noted. According to the executive, the crypto payment option would benefit foreign tourists, including those from Russia.
“We must advance in these new economic and technological systems to be accessible,” Borges reportedly stated.
The news comes amid Venezuela experimenting with a central bank digital currency (CBDC), with the country’s central bank launching the digital Venezuelan bolivar on Oct. 1. Unlike a CBDC, which is pegged to Venezuela’s national currency, the Petro is an oil-backed cryptocurrency launched by the government in February 2018.
Several airports and airlines around the world have been exploring ways to introduce crypto payments and blockchain-based functionalities in recent years, providing better options for cash payments and improving customer verification services, including COVID-19 test results.
In March, Latvian airline airBaltic started accepting Ether (ETH) and Dogecoin (DOGE) as payments for tickets after rolling out crypto payments back in 2014.
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