Bitcoin and Litecoin offer stability in Venezuela's shaky economy
Venezuela once had one of the strongest economies in South America and was thriving economically and financially. Unfortunately, this is not the case in the present day and Venezuela is facing extreme interest rates which are running their currency into the ground. Politic tension is high in Venezuela and the government has now launched government-sanctioned cryptocurrency remittance services.
US sanctions, political unrest, violent protests, economic collapse, and hyperinflation have sent Venezuela down a difficult path and has left the country in turmoil. Initially, the government of Venezuela created its own cryptocurrency named Petro which was launched in November 2017. The Petro did not do well after they tried to raise the value of their own cryptocurrency, which was unsuccessful.
The new government-sanctioned cryptocurrency remittance service will allow the people of Venezuela to send and receive Bitcoin and Litecoin. The platform is designed to create financial inclusion along with the social protection of the people of Venezuela.
The president of Venezuela is attempting to beat the US sanctions as he continues to refuse food and medical aid from the US.
Superintendency of Cryptoassets and Related Activities controls and regulates the buying and selling of Bitcoin and Litecoin, which is under the leadership of the president. The Superintendency of Cryptoassets and Related Activities will establish a monthly limit on Bitcoin and Litecoin and the population will be able to access this through the online portal.
This is the first step towards Bitcoin and Litecoin being considered a currency of a country, although the government is still regulating Bitcoin and Litecoin through Bolivar. The only issue with this will come when the people of Venezuela realize that they do not need to pass their cryptocurrency through the government and can trade it directly to one another as well as across international borders.
The future of Venezuela should be interesting to watch and the hope is that this country can pull itself out of its current turmoil. The Venezuelan government has announced that the cryptocurrency remittance services can be disabled at any time and the service will work on commission which will be calculated daily. This is an attempt for the government to maintain control over the cryptocurrency and to make money from the service.
Whether or not cryptocurrency remains regulated by the Venezuelan government is something which will need to be observed, however, one thing that can be seen here is that cryptocurrency can successfully be used as a day-to-day currency and it can assist the countries with a weak currency.