Overview of Venezuela’s Hyperinflation and its Crypto: Petro
Venezuela is said to be experiencing the worst inflation ever. The International Monetary Fund (IMF) has also reported that Inflation in the country is likely to reach about a million percent before the year runs out.
The IMF has also reported that the hyperinflation faced by the government of Venezuela is the highest ever recorded by a South American country and it can be compared to that of Germany after the first world war. In bids to save the economy and bring in more investment to the region. The country’s authorities announced that it will be launching a cryptocurrency named Petro.
Petro is Backed by Venezuela’s Massive Oil Reserve
The Petro cryptocurrency is said to be backed by Oil and gold. This makes perfect sense since Venezuela is said to have the largest proven oil reserve on earth. Turning to the oil reserves as a form of savior for its dilapidated economy would be considered a wise action by the government. However since the announcement of the Petro coin, apart from the backlash, the government has received from industry experts, the economy of the country has worsened.
This bad economy has led to many people being homeless and unable to afford food. It has also led to an increase in crime rate. The current crime rate has been reported as the highest ever recorded in the country.
In a statement made by the UN Human Rights Commission’s latest session, commissioner Filippo Grandi, it was stated that:
“Some 5,000 people are now leaving Venezuela daily – the largest population movement in Latin America’s recent history.”
Government Doing all it can to Stop Massive Migration
With so many people leaving the country in search of a greener pasture. The need for a passport becomes necessary.
In bids to curb the excessive migration the country is experiencing, the president made an announcement that:
“starting next month, Venezuelan citizens who want passports will be required to purchase them using the nation’s elusive virtual currency, the Petro. Passports will cost two Petro, the equivalent of 7,200 sovereign bolivars.”
It is important to take into consideration that the minimum wage of the country stands at 1,800 bolivars per month. It has also been reported that officials are requesting for bribe up to about $1000 before issuing these passports.