Runaway inflation continues to devalue the Venezuelan Bolivar (VEB), even as the country’s authoritarian government seeks to divert attention from the floundering economy by hawking its “Petro” cryptocurrency.
According to Reuters, prices in Venezuela rose by 454 percent during the first quarter of 2018 and have swelled by 8,900 percent over the past 12 months.
Those numbers are from the opposition-controlled National Assembly and are largely in line with estimates from independent economists. Venezuela’s central bank, meanwhile, has not published official inflation data in more than two years.
This hyperinflation has left Venezuela on the brink of economic collapse, and residents are fleeing the country at an estimated rate of 5,000 migrants per day. By the end of the year, more than five percent of the country’s population — or 1.8 million people — will have left Venezuela.
But rather than address these problems, the government of what was once Latin America’s wealthiest country instead continues to sing the praises of the Petro, its new state-backed cryptocurrency.
President Nicolas Maduro has declared the Petro to be legal tender, and he has claimed that its initial coin offering (ICO) has raised more than $5 billion from investors across the globe. It even received the “Satoshi Nakamoto Prize” from the Russian Cryptocurrency and Blockchain Association, an award it received for reasons that are dubious at best.
Notably, though, the legislature has declared the Petro to be illegal, and many analysts continue to doubt that it actually exists.
But even as Maduro touts the Petro as the solution for all of Venezuela’s ills, the country’s residents are turning to another cryptocurrency to secure their wealth amidst the turbulent economic backdrop: Bitcoin.
Data from peer-to-peer (P2P) cryptocurrency trading platform LocalBitcoins shows that VEB/BTC trading volume has steadily increased throughout 2018. During the second week of April, that trading pair saw 645 BTC in volume, which works out to roughly $5.1 million at the present exchange rate.
Featured image from Shutterstock.
Last modified: May 20, 2020 8:52 PM UTC