In the years leading up to Venezuela’s announcement that they will be launching their own cryptocurrency,
the country has been plagued with economic strife and struggle, resulting in massive inflation hikes.
Even though Venezuela is rich in lucrative resources like oil and gold, financial uncertainty has caused starvation and shortages of essentials such as medicine.
However, the country’s president, Nicolás Maduro, believes that putting these reserves into supporting its state-controlled digital currency is the way forward. This would also alleviate some of the stress associated with US-imposed sanctions as trading in virtual currencies would allow the country to circumvent these roadblocks.
According to Maduro, each Petro will be back by a barrel of the country’s precious oil, of which there are five billion barrels available. The president had this to say:
In addition to the benefits of having a digital currency, the mining process regarding the Petro could be a valid employment option in the country. In fact, Maduro recently announced that over 860,000 citizens have registered to mine the state-controlled crypto.
These miners will have their first meeting on the 14th of January. This is also the date that the currency’s white paper will be released.
Venezuela has made real progress in their quest to develop the Petro. Other countries are also taking tentative steps to creating the own cryptocurrency,
which they will be able to control as opposed to decentralized virtual currencies like Bitcoin.
Even so, Bitcoin and the like have gained massive traction in countries where the economic landscape is clouded in corruption and uncertainty. Venezuela is one such country. Its aforementioned financial crisis led to more and more people turning to stable, by comparison, currencies such as Bitcoin.
Other countries mired in similar economic conditions, like Zimbabwe, have also seen an increase in crypto adoption. The demand is so great, that Bitcoin in the country is trading at well over the global average.
Developing countries such as South Africa, Kenya and Sudan are also eagerly hopping on board the Bitcoin train in a bid to combat their own country’s financial problems.
Countries like Russia and Israel are also hoping to benefit from virtual currencies, without the disruptive nature of centralized cryptocurrencies. Russia is hoping to developing their own CryptoRuble, while Israel has an aim of creating a digitized shekel.