Topic: Venezuela In Chaos - Massive 95% Devaluation -new Bolivar pegged to state crypto (Read 670 times)

Ya, Venezuela has all the natural resources that it needs.  The problem is the government which is mismanaging the resources.  The people no longer trust government currency and any state crypto that is created will not be adopted.  They will continue to use decentralized coins like bitcoin on the dark markets.

Venezuela was originally a country with abundant resources, prosperous economy and strong national prosperity.
In just ten years, Venezuela has become a country with a sharp economic contraction, inflation, external debt, and extremely poor people's lives.
The government of Venezuela is the biggest sinner!

It would have better if they have simply pegged the value to gold instead to ensure it is a more stable currency. At the very least peg it to the bitcoin! I'm sure that eventually the whole of the venezuelan economy will be crypto based, we will see the streets lined with prices in sats, petro, eth, and tether

I agrre that it's not a contradiction. Decentralized cryptocurrencies are important to be more resilient against government's interference.

As petrol is made by the government, it makes more sense to make it centralized.

I believe you are right too about petrol being just a way to finance his own broken government

It would have better if they have simply pegged the value to gold instead to ensure it is a more stable currency. At the very least peg it to the bitcoin! I'm sure that eventually the whole of the venezuelan economy will be crypto based, we will see the streets lined with prices in sats, petro, eth, and tether

Actually, centralised cryptocurrencies are not necessarily a contradiction. It's just that it makes no sense for anyone to make an investment or affiliation with any centralised cryptocurrencies because it essentially is the same as any other fiat.

I honestly don't see where Maduro is trying to go with the Petro other than trying to lure in investment from overseas to finance their regime and escape sanctions, potentially.

The thing with Bolivar pegged to Petro is that Petro is not backed by actual oil reserves, but land that has unmined oil reserves which need significant investment in mining to actually dig out of the ground. Tying the bolivar to this centralised asset will do nothing to help the hyperinflation going on within the country at the moment, in my opinion.

A centralized cryptocurrency under government control is a contradiction in terms, so it doesn't make any sense.
Simply, Maduro is trying to save the savable, still deluding the population a little with an unrealistic proposal while preparing the escape plans.
Too bad, Venezuela is a magnificent country and does not deserve the suffering it is going through due to incompetent and corrupt politicians.

This subject is so interesting and crypto related that I can't believe nobody wants to say anything.
My topic is lost in the spam sea that the economics board became :/

Venezuela was originally a country with abundant resources, prosperous economy and strong national prosperity.
In just ten years, Venezuela has become a country with a sharp economic contraction, inflation, external debt, and extremely poor people's lives.
The government of Venezuela is the biggest sinner!

Pegging their national currency to Petro doesn't really do much to help.

Thanks for this info, this somehow explains why a country rich in oil does not profit from it, or we may say that very small % of people make some profit, but but the rest of the population gets only crumbs. Of course there are also economic sanctions from USA, all in all a very bad situation.

something will have to change - if not by citizens in Venezuela then maybe with some outside help. We've all seen how "democracy" is introduced in Iraq, Afganistan, Syria and some other countries...

But situation will touch the bottom at one point, something will have to change -

Pegging their national currency to Petro doesn't really do much to help.

Venezuela has "heavy oil" that requires significant additonal treatments to make it useable.

Its actually because, nobody wants a real revolution...
The things are so bad in Venezuela that there are only two solutions
-pray to the great Karhu that oil prices go up
-massive cuts in government spending

And since the first one is pretty obvious it won't work the second threatens millions of government employees.
They won't let a revolution happen, they cling to their positions which at least now it grants them a bit of food, they will do anything to prevent it. With the support of those, with the military that is also dependent on government paychecks, with the support of fanatics that still believe the US is to blame for it, with the silence of the many that indirectly depend on the former and the fear of change from others...nothing will change.

Even the opposition knows that even with Maduro gone, the way back out of this mess will be even harder than what's happening now.

The only thing we will see in Venezuela is how the end of a country looks like.

Venezuelans are started accepting Dash in their stores, so when your local currency is not good store of value, then cryptocurrencies could be good option. I hope that we do not need to wait Venezuelan scenario for cryptocurrencies adoption.

In the sense that you could put a gun to someone's head and then claim that you're "keeping them alive" until the moment you pull the trigger, sure.  But at some point you have to consider if the situation would be improved by removing your involvement from the equation.  Obviously the US are incapable of that, though.

Its actually because, nobody wants a real revolution...
The things are so bad in Venezuela that there are only two solutions
-pray to the great Karhu that oil prices go up
-massive cuts in government spending

On more than one occasion the late Venezuelan president Hugo Chávez declared that being rich is bad, often adding “Rich people attack me for saying that, but I claim it is bad.”

His favorite daughter, however, may disagree.

According to the Miami-based Diario Las América, Venezuelan media sources will soon publish materials showing that María Gabriela Chávez has bank accounts in the U.S. and Andorra with assets totaling nearly $4.2 billion.

Yeah, giving the finger to the ones that are keeping you and your country alive.
The moment the US bans at least oil trade not a full embargo on Venezuela, the country will be sent from the stone age directly into the Mesozoic.

On the other hand, I like the fact they're giving the finger to "Team America: World Police".  US foreign policy has pretty much become a blight on humanity at this point.  They are categorically not making the world a safer place.  More countries need to defy their increasingly absurd will.  If state-backed cryptocurrencies become the new norm for doing this, I'm okay with that.

Why there is no revolution is good question, but in country which have dictator like Maduro this is not easy to achieve - any such attempt is crushed at its very beginnings, military and police take care that this does not happen. Also hundreds of thousands have left the country, by some data almost 1 million people emigrated from Venezuela-migration-situation . So a large number of dissatisfied already gone, critical mass has decreased a chance for some serious change is very low.

On the other hand, I like the fact they're giving the finger to "Team America: World Police".  US foreign policy has pretty much become a blight on humanity at this point.  They are categorically not making the world a safer place.  More countries need to defy their increasingly absurd will.  If state-backed cryptocurrencies become the new norm for doing this, I'm okay with that.

It's most times not about one man that is trying frantically to pull his country down. started by a dictator.

It's actually more than questionable since a drone can be accurately tasked to do something, even when it's equiped with whatever explosives making its steering less responsive. With the right amount of training one should be able to overcome that difficulty, especially if the task is getting rid of someone of this nature.

I strongly believe it's just Maduro himself that orchestrated this whole "attack" to justify his military spending and whatnot. The response of the guards quickly protecting Maduro after the explosions is just as questionable. It's not human's nature to react like that, regardless of how trained you are. They probably knew it wasn't an actual attack as well.

Looks like that's the main objetive of the leaders (Maduro & co) that are causing such an economic collapse. They know that they'll have more control  and power over the citizens the more chaos they create, the govt knows that by increasing the minimum wage so drastically, many private companies will need to dependant on the govt, I bet that's exactly what the govt wants: to destroy or weaken the private sector so that everyone depends on the state.

It still amazes me how one man can do so much damage in a countries economy, pushing its people into extreme poverty and nobody being able to do anything about it... It's sad that this is happening to the Venezuelan people.

I see this move to crypto as a desperate attempt to save the economy but he still doesn't get it. The more decentralized they go the worse it will be to the country as no one in their right mind would invest in something started by a dictator.

They tried to kill him with a drone last month, but the attack failed.
https://www.reuters.com/article/us-venezuela-politics/venezuelas-maduro-says-drone-blast-was-bid-to-kill-him-blames-colombia-idUSKBN1KP0SA

It still amazes me how one man can do so much damage in a countries economy, pushing its people into extreme poverty and nobody being able to do anything about it... It's sad that this is happening to the Venezuelan people.

I see this move to crypto as a desperate attempt to save the economy but he still doesn't get it. The more decentralized they go the worse it will be to the country as no one in their right mind would invest in something started by a dictator.

Heavy oil usually contains significantly higher contents of asphaltenes

The presence of asphaltenes, chemically altered fragments of organic chemical compounds, in oil can greatly complicate the production process. Subsequently, certain asphaltene elements require that the heavy oil also undergo a special refining process called deasphalting. The chemical composition of asphaltenes can consist of various amounts of sulphur, oxygen, hydrogen, nitrogen, carbon, and the heavy metals nickel and vanadium and are widely recognized as soluble.

The oil production in Venezuela decreased a lot and actually Venezuela is importing oil anf gas.That's why the idea of the oil-backed PEDRO currency is doomed to fail.Anyway,why the hell there's no revolution or rebellion against Maduro and the government?It looks like they are still popular amongst 50% of the population of Venezuela despite all the hyperinflation and economic disaster.

It looks like they are still popular amongst 50% of the population of Venezuela despite all the hyperinflation and economic disaster.

Bitcoin gives people hope. It could be the only thing keeping many venezuelans from starvation.

Unless Maduro's goal was to deliberately take one of the more prosperous south american nations, devalue its fiat currency and obliterate its economy. Its difficult to imagine how something like this happens. And continues to happen.

Bitcoin gives people hope. It could be the only thing keeping many venezuelans from starvation. Bitcoin is a symbol of hope, solidarity and value.

If state-backed cryptocurrencies become the new norm for doing this, I'm okay with that.

Chaos and confusion erupted across Venezuela, and most stores were shuttered on Saturday, after president Nicolas Maduro announced that the government would enact a massive currency devaluation, implement a new minimum wage, hike taxes, and also raise gasoline prices for most citizens even as the country struggles with the greatest hyperinflation on record, surpassing even that of the Weimar Republic.

As a result of the enacted actions, the new version of the bolivar will be pegged to the value of the state cryptocurrency, the etro, which according to Bloomberg amounts to a 95% devaluation of the official rate, and will trade in line with where the black market was; the government will also raise the minimum wage more than 3,000 percent,  which works out to about $30 a month.

Maduro said the new currency, set to enter circulation on Monday, will be called the "sovereign bolivar" and will be based on the petro, which is valued at $60 or 3,600 sovereign bolivars, after the redenomination planned for August 20 slashes five zeroes off the national currency. The minimum wage will be set at half that, 1,800 sovereign bolivars.  The government would cover the minimum wage increase at small and medium-size companies for 90 days, Maduro added. It was not clear what happens after.

"They've dollarized our prices. I am petrolizing salaries and petrolizing prices," Maduro explained in a Friday televised address. "We are going to convert the petro into the reference that pegs the entire economy's movements."
....
The package of measures combine the necessary with the baffling, Luis Vicente Leon, president of the Caracas-based pollster Datanalisis, said in a Twitter post on Friday.

    “The government has recognized the need to anchor the economy to an external variable outside of its control, such as the international price of oil. A wise decision, but it does so by hiding it in a vehicle that suffers from lack of confidence and viability, such as the Petro,” Leon said.K

Maduro also said he intends to create a unified exchange rate across the country. The new petro-to-dollar-to-bolivar rate would bring the official price of one US dollar to six million (or 60 post-redenomination), which is about the same as the current black market exchange rate and about 25 times worse than the official rate.
To implement the bizarre plan, information Minister Jorge Rodriguez said Saturday the government will open 300 currency exchange kiosks in hotels, airports and shopping malls as part of a bid to supersede the country’s black market.K