In our annual look back (and forward) post, we mused that the advent of central bank-supported digital currencies was the top financial story of 2020, buried deep under the landslide of health and political developments from covid to the US presidential election; we also said that the most important narrative of 2021 would be how fast – and where – digital currencies would be rolled out first.
Yet while we recently speculated that China would be the first major economy to unleash a digital currency, little did we know that the first country to officially make the jump to a “fully digital” economy would be… Venezuela!?
That’s right: according to Bloomberg, Venezuela’s government is preparing to move to a fully digital economy – whatever that means for the country which several years ago adopted some bizarro crypto currency as the de facto petrocurrency of the state to… perplexing consequences, as hyperinflation in this South American socialist paradise (coming soon to every socialist paradise nears you) has made worthless bolivar notes practically disappear. With the local monetary system having collapsed, the US dollar has operated as an “escape valve” for Venezuela amid U.S. sanctions and collapsing oil revenues, President Nicolas Maduro said in a televised interview with Telesur on Friday. He said 18.6% of all commercial transactions are in dollars, while 77.3% are carried out in bolivars with debit cards. Only 3.4% are paid with bolivar notes.- READ MORE
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