Venezuela continues to dabble in cryptocurrencies. After the country introduced its first cryptocurrency a few months ago, the El Petro has not caused much stirring abroad or at home. In the words of Venezuela’s President Nicolas Maduro, the El Petro managed to fetch up to $735 million only hours after it was released, in which some saw blatant lies, while others expressed concern that criminal minds were looking to launder their illy-gained cryptocurrencies.
The Status Quo
Either way, the fact that a rogue state may attempt to legitimize itself using blockchain and crypto tokens has been disconcerting enough. Similar news came from North Korea where the regime has reportedly been funding hackers. Those same hackers were allegedly responsible for the spate of attacks on Japan and South Korea’s crypto exchanges.
With the fight against cyber criminals intensifying and governments getting concerned that their citizens may be unwittingly walking into an elaborate ploy, many have raised an alarm, including Japan’s central banking body. During a Q&A a month ago, the bank warned that cryptocurrencies are high-risk assets, and citizens ought to refrain from investing in them.
Venezuela Leaps Forward
Mr Maduro, however, seems quite at home with the changes that his regime has introduced. He is absolutely pleased with the fact that the state-backed cryptocurrency has been able to raise nearly 3/4 of a billion when the country’s minimum daily wage increased to $1.65 only recently. This stark contrast definitely cuts deep, at home and abroad.
The New Initiative, The New Bank
The latest folly of Mr Maduro involves the launch of a state-owned crypto bank for the ‘youths’, using the populist rhetoric of the man himself. The bank will be backed by cryptocurrencies and the announcement came on Thursday by the president himself.
The bank will open with a hefty load of 20 million Petros ready to be circulated. In this latest announcement, Mr Maduro revealed that the El Petro’s net worth has increased to $1.2 billion. He talked about launching ‘productive initiatives’ in the hopes to restore the county’s appalling economy.
The Opposition Remains Firmly Opposed
The country’s opposition leaders have been firmly against the new cryptocurrency. According to the marginalised opposition, Mr Maduro has coined the El Petro to use it as a temporary patch of his crumbling regime.
An autocrat surrounded by foes, Mr Maduro does not have the luxury of seeking the rule of law. Should he attempt such a folly, he will end up behind bars. His crypto experiment is unlikely to give much fruit either.
The Crypto Climate All Across South America
According to Newstbc, cryptocurrencies constitute a much-needed source of investment in Latin America. They are particularly useful in granting bearers a relative financial independence which allows to emancipate them from the rule of law, similar to what Mr Maduro is offering. With this in mind, it is understandable why the crypto gold may cotton on in Latin America.
However, in the lack of regulatory measures, this financial freedom is quite dubious. While someone may be rich on ‘digital paper,’ local corrupt regimes will be quick to find out any individuals who command significant investments of crypto gold. What may follow next is anyone’s guess, but it is certainly not in the interest of anyone who invests in crypto.
How to Achieve Economic Independence Via Cryptocurrencies
Call us doomsayers, but we do not believe that any regime in Latin America can establish itself as a legitimate one right now. Instead, anyone who attempts a mass-scale launch of cryptocurrencies will be involved in this to propagate illicit activities or push ahead with other nefarious activities.
It is quite obvious that what has to be done is for the people of Latin America to seek and establish governments and financial regulators that are free of corruption and from ties with the criminal underworld. Only then can these people continue to push for innovation through cryptocurrencies.
Anything else will be tantamount to giving the individuals who seek to ruin countries and economies for personal gain a stronger weapon. Mr Maduro may not have friends, but he holds dear people’s hope that things might change. His attempt to whip up support among the youths is just the continuation of an illusion while Venezuela slides off the face of history.