It is expected that a new Venezuelan fiduciary currency, 'anchored' to national cryptography, the Petro, will begin to circulate in the second half of August. The news was announced by President Maduro himself, along with other measures aimed at improving the economic situation in the country. The 'Sovereign Bolivar' will have less zeros than the 'Fuerte Bolívar' inflated.
Stuck Petro? Bolivar Sovereign said bring hope to Venezuela
Bolivar 'Anchored' to the Petro to be issued in August, Maduro says Bolivia Soberano (Sovereign Bolivar), the new Venezuelan currency that claims to be anchored to the national cryptocurrency, Petro, will start circulating on August 20, announced President Maduro in state television. The sovereign Bolívar will have five less zeros than the current one, very inflated, "Fuerte Bolívar", or Bolívar Fuerte (VEF), which replaced the original Venezuelan bolivar (VEB) about a decade ago. Regarding the oil tanker El Petro, Nicolás Maduro promised that the cryptography issued by the state "will end up being consolidated technologically and financially" to "penetrate all national and international economic activity."
"The economic reconversion will begin on August 20, definitely, with the circulation and issuance of the new Sovereign Bolívar, the new monetary cone that will have a new method of anchoring the Petro," said the Venezuelan head of state, quoted by the network television company. The measure, added President Maduro, will serve "to stabilize and change the monetary and financial life of the country in a radical manner."
Maduro continued emphasizing that a "productive, diversified and sustainable economic model must definitely be born" in the South American country, which has experienced hyperinflation and has struggled with deep economic problems for years. The socialist leader stressed that the reconversion and anchoring to Petro represent "a great hope". No details have been disclosed about the exact mechanism of the Venezuelan cryptocurrency link.
Building a new post-oil economic model
"I ask for your trust, I ask for your support, beyond ideologies and political positions, because Venezuela needs this change, the mafias are over!" Said the leftist Venezuelan president, who also announced other measures aimed at improving the country's economy. . Among them, a new decree that assigns the block Ayacucho 2 (more than 29 billion barrels of oil) to the central bank of Venezuela to strengthen its reserves, and legal amendments related to foreign currency related crimes. "We have the correct vision of what the economic future in Venezuela should be, above all, we will achieve it," said Maduro.
According to the Bolivarian leader, the economy of his nation has been affected by two main factors. "Venezuela has been trapped during these years by two fundamental variables: the exhaustion of the oil model [...] and the establishment of a mechanism of economic warfare, as part of a political strategy," he explained. The president believes that the "oil-dependent model has come to an end and will not return", and Venezuela must continue its efforts to build a new economic model. This, Maduro stressed, should be "diversified, productive, relevant, [and] advanced".
Bolívar 'Anchored' to Petro will be issued in August, says Maduro
The Venezuelan bolivar is one of the most inflated national currencies in the world. For example, the new note of 100,000 bolivars was reportedly exchanged for less than $ 2.50 when it was issued last November. Now inflation is expected to reach 1 million percent by the end of 2018, according to the IMF, cited by Bloomberg. The exact price of the bolívar is difficult to determine since the restricted access to convertible foreign currencies in the country has created a considerable black market with its own rates that differ considerably from the official one.
In March, Nicolás Maduro announced that he "decided to eliminate three zeros of the current money and replace them with new ones". The denomination of the bolivar was intended to "guarantee the economic stability of the country," as he himself said. The Venezuelan president showed copies of bills that were supposed to go into circulation last June, but the release was delayed until August 4. It is expected that the launch of the recently announced Sovereign Bolivar, on August 20, will fulfill that promise.
Do you think that Venezuela will be able to overcome hyperinflation with its new fiat anchored to the Petro crypto currency? Share your expectations in the comments section below.