Venezuela focuses on digitalization of the economy

Venezuela focuses on digitalization of the economy

Venezuela has been a country where thanks to the crisis there has been a real use of cryptocurrencies, I have had the opportunity to shop in many places and pay with cryptocurrencies, I have even paid with Hive.

On the other hand, the Venezuelan government launched its own cryptocurrency, the Petro, its launching was not very efficient and society did not respond as expected, although at fiscal level it is already possible to express values in Petro. Since the State started to give economic bonds to citizens, it developed an application to receive these aids, by this means a constant communication is maintained with the people, in addition there is a wallet where people who receive the aid bonds, from there they can pay their basic services, transfer to other people or withdraw that money to their national banks. When the Petro was launched, the benefited citizens learned that they could sell this currency in an online market (exchange) and that they could pay with this currency in stores.

The Bolivar which is the national currency practically does not exist in cash, it has become scarce and most of the daily payments are made through credit cards, debit cards, dollars in cash and mobile payment. Our national currency, the Bolivar, is constantly losing value, the prices of all products are generally expressed in dollars, however, the Venezuelan government calls it "An escape route", the country is not dollarized.

And based on all this complex scenario, the Venezuelan government proposed as a goal the digitalization of the economy, that transactions and payments are made through digital payment methods, for this purpose authorized the opening of accounts in dollars in the Central Bank of Venezuela and expects that citizens give greater utility to the Patria system (wallet system and receipt of aid bonds).

What are some challenges for the digitalization of the economy in Venezuela?

- The infrastructure of communication networks

Communication networks have deteriorated considerably, there are cities where there is access to telephone communication only in certain parts, where to survive they depend mostly on the cash dollar and the support of family members with internet access that can facilitate transactions. Not because they don't want to or can't, but because the signal transmission antennas have been removed or stolen and the telephone service operators have not done the proper maintenance, then families who want to be communicated must make a greater investment or reach an agreement in their communities and look for a solution together.

I think that society itself could at some point move forward, look for its own solutions and stop being paternalistic. But here is another interesting point, the average income of a family is not always enough to pay private rentals for internet access. In my case, I have sometimes had to pay bills of up to $80 per month, in a country where the minimum wage is $2.

- Technological literacy

With the launching of the Petro, the main beneficiaries were the grandparents, yes, the elderly, of which there is a very large group that does not even have access to a smartphone. With this measure, other people in the family group had to support their grandparents, accompany them to do the shopping or be in charge of buying the Petros in exchange for Bolivars.

Although Venezuela is a country with an internet penetration of 72% according to Hootsuit in its January 2020 report, there is still a challenge for many citizens to lose the fear of making digital transactions.

On the other hand, I have observed the propaganda of the State on television, radio and other digital media where they explain in a basic and simple way what a cryptocurrency is, what is the Petro, what is a wallet and even talk about the main cryptocurrencies such as Bitcoin and Ethereum.

- Digital infrastructure

In some national banks we continually experience server downtime events, platforms collapse, at Christmas we saw an example of this. There are also double spending things, the most common problem is server downtime due to collapse.

This is just to mention some items, I know there are other factors, especially at a social level.

Can the Venezuelan government's efforts benefit the adoption of cryptocurrencies in Venezuela?

I consider that one of the biggest challenges are the infrastructures to improve communication; because there are many families with smartphones that have such bad quality in the internet signal reception that they can only use whatsapp. Sometimes I questioned why if they can use whatsapp they can not access a website or other platforms, but when I lived it at Christmas I understood it, and I understand why in Venezuela the use of Facebook and whatsapp is so great. With the minimum access to internet the Facebook notifications arrived, I was really surprised of its adaptability for countries like Venezuela. Lol, I did many tests with different platforms, Exchange, web pages and more, maybe someday I will talk about it.

I particularly consider that the usefulness of cryptocurrencies even goes beyond some technological aspects, it is the education and reliability in the system, even Dash developed a platform for sending coins by text messages without being so successful. There are many factors that have led to the lack of greater adoption of cryptocurrencies in the country, one of the most important being the lack of a plan with a previous study and adequate investment to enter a country like Venezuela. The case of bitcoin is different, there are traders who support their families through their jobs in Localbitois and now in Binance with P2P exchanges; so when citizens manage to see cryptocurrencies as something tangible, it is not only a means, it is something much more credible and real.

Final thoughts

I could write many more things about this topic because I study it every day, I have become very analytical of the reality of my country, I like to ask and go out and explore how everything is out there, how the common Venezuelan is living, the citizen who is the majority.

A week ago I went to Traki a department store in Venezuela, I wanted to buy some lights and a vase to decorate my recording set, and obviously I wanted to pay in cryptocurrencies because I have done it before and I couldn't do it, I couldn't because my mobile operator has bad signal reception there in the store, it is the same operator with which I bought the previous times. I could have wished I had dollars in cash or bolivars on my cards, I just returned things to their place and bought nothing. I like these things to happen to me because it allows me to know the reality that others live, that day I had to live it too.

Big corporations are not big by chance, they are big because they usually know how to solve problems, take advantage of opportunities and create trends. If the Blockchain and cryptocurrency world learns what I have just mentioned, there will undoubtedly be success.

Venezuela right now looks like a laboratory, it is a country with crises and sanctions, rich in minerals, opportunities and risks. The next article is "How Venezuela would be if there was a real adoption of cryptocurrencies" I will try to put real examples of the current problems and of course I will try to be brief.

Thank you for reading this article to the end, I am not an expert on these issues, I am just giving my opinion.