As a result of falling oil prices and poor economic policies, the value of Venezuela’s local currency has reached new lows, with a cup of coffee now costing 1 million bolivars. In a situation similar to that of struggling African nation Zimbabwe, inflation in the country has risen by 43,378 percent over the past year.
President Nicolas Maduro blames the United States for waging an ‘economic war’ on his country but evidence points to other reasons. Even the recent announcement of a 155 percent wage increase does not improve the cost of living for Venezuela’s struggling citizens. Failure by previous rulers to capitalize on the oil boom in the 90’s has also been to blame.
As the result of these economic problems, residents of the country have looked to alternative means of storing currency. Cryptocurrency became very popular in the country early last year and has continued to gain interest but recent regulations imposed by the government may impede progress. The ruling party has even attempted to launch their own oil-backed cryptocurrency, the Petro coin.
Randy Brito, the founder of a popular local Bitcoin website, believes the recent regulation has stalled cryptocurrency trading in the country despite the hyperinflation.
The government has announced plans that they will attempt to reduce the economic impact by devaluing the local currency and removing three zeros from the Bolivar. However, this tactic hasn’t proven very successful in other countries suffering similar problems and citizens aren’t convinced. As a result, many are looking to alternatives means of ensuring a safe future for their money.
A recent initiative by developer Jonathan Wheeler plans to airdrop a massive amount of Bitcoins to citizens in the country. Unfortunately, he has been unable to reveal too many details of his plan due to fears of intervention by local government. If caught, those he is working with in Venezuela could be charged with attempting to deviate political opinion.
Considering that the nation as a whole has been reported to be losing weight due to lack of access to basic food requirements, we can only hope his plan works out. A similar project has recently been launched by Coinbase to assist the needy in impoverished African nations.