The recent changes to Venezuela’s currency have yet to stop the nation’s economic free fall, leading many Venezuelans to resort to cryptocurrency. But not the one the government issued.
On Monday, Venezuela rolled out its new currency, the sovereign bolivar, which lopped five zeros off their previous currency. This new currency has been pegged to another recent creation, Venezuela's official cryptocurrency, the petro. Though it's too early to tell if the steps the country has taken to halt its runaway inflation have worked, the early evidence doesn't look promising.
Banks were closed Monday to ease the transition, but by Tuesday shops remained closed in the country, with many citizens confused by the new currency. Some didn't even wait to see the outcome before offering a verdict. Writing in Forbes, economist Steve Hanke declared President Nicolás Maduro's policies a scam[1] that had no hope of solving the crisis. He wasn't the only one to use the word "scam[2]" to describe the both the new policies in general and the petro[3] specifically.
High inflation has been a problem for Venezuela since 2014. But the problem dramatically worsened in the following years, with rates increasing almost exponentially, reaching 4,000 percent in 2017. Estimates for the inflation rate for 2018 range from 5,220 percent to as high as 1,000,000 percent. It was during these last couple years that Venezuelans became more interested in buying bitcoin[4]. After the country's fiat currency became less valuable than toilet paper, it's understandable that they sought an alternate store of value. But bitcoin, with its slow transaction times and high transfer fees, isn't great for making purchases.
Dash recently claimed their cryptocurrency is the most used in Venezuela, at least for commercial transactions. According to a
