In the next month of October, the Venezuela will launch the digital Bolivar. That is the national version of the Central Bank Digital Currency (CBDC), along the lines of what the China.
This is a no small surprise, considering how President Nicolas Maduro talked about it in February of this year. Its practical implementation therefore takes place over a period of time that can in fact be considered very short, especially in light of what has been done by other countries. His introduction will lead to the suppression of six zeros from the official quotation of the currency.
Digital Bolivar: what is its introduction due to?
What is Venezuela's acceleration in launching its digital Bolivar due to? Among the possible explanations, the first relates to the problem represented by the fact that Petro has never been legal tender in the country. It Maduro he did his utmost to encourage its use, for example by donating a wallet to all students, however, the national cryptocurrency has not reached the market share that was imagined at the time of its launch.
The second is that relating to the fact that the traditional bolivar has never stopped being distressed by excessive levels of devaluation. Such as to push the government to take alternative routes anyway, to try to find a solution. Until the epilogue represented by the digital Bolivar.
The problem may soon reoccur
According to economists, the cut in the Bolivar price it will have the effect of greatly facilitating transactions, at least in the short term. Second Luis Vicente, however, if the country does not tackle the problem of its economic organization, within a semester the problem is destined to reappear with the same features. To avoid this, the way is that aimed at attenuating the imbalance between massive public spending and insufficient local production. A problem which, however, involves a long time for its resolution.
In the meantime, however, in order to try to mitigate the effects of inflation on salaries and pensions, more and more are those who change the money received into cryptocurrencies. Although volatile, in fact, BTC and Altcoin guarantee greater resistance compared to the sovereign currency. So much so that the country is one of those that have most developed the digital economy. Not only among those of the South America, but also globally.
The US embargo and the attempt to limit international isolation
THEembargo operated by the United States it continues to throttle the country, as it happens in Cuba. Making it difficult even to bring in medicines, including those used to fight Covid.
Over the past few months, Maduro has taken steps to limit isolation. And some results in this sense are beginning to arrive, also thanks to the change of regime in some countries hitherto governed by the right. From Perù, where the new President, Pedro Castillo, he has already indicated his intention to no longer follow the policy of the Lima Group and to want to establish friendly relations with Venezuela. As indeed Bolivia and Argentina could do, other countries where the left forces have triumphed in the last presidential elections.
However, others also seem willing to challenge the United States. Among which China, Russia and Iran, but not only. If this happens, the situation for Venezuela could change considerably and allow Maduro to limit the damage of the US blockade.