As a result of a heavily failing economy, the Venezuelan government has decided to move to a fully digitized economy. With U.S. sanctions and collapsing oil revenues plaguing the country, hyperinflation has practically made the bolivar banknotes worthless. What’s more, the U.S. dollar is being used on an increasing basis as a medium of trade.
In fact, Venezuelan President Nicolas Maduro revealed in a recent television interview that a shocking 18.6% of all commercial transactions are done through American dollars. What’s more, only 3.4% of all transactions are paid using bolivar banknotes.
In the three years since the start of Venezuela’s hyperinflation, the Venezuelan bolivar has decreased in value by 99%. A Bloomberg report also reveals that inflation has skyrocketed by 5,790% in the last 12 months.
The largest note in circulation at present—the 50,000 bolivar note—is worth just $0.04. While the government planned to create a 100,000 bolivar note, this plan has been put on hold.
Another project that the government began to implement in 2017 was the establishment of a cryptocurrency known as Petro. Backed by gas, gold, diamonds, and oil, this cryptocurrency was labeled as a scam by the US government.
