The Venezuelan government is considering leveraging blockchain technology to improve the country’s financial situation.
As reported by Criptonoticias, this week the Central Bank of Venezuela met with several experts in blockchain technology and cryptocurrency to discuss their impact in improving the Venezuelan economy. This was in particular to address issues related to the devaluation of the bolivar and foreign currency exchange issues, made worse by new regulations imposed by the United States.
An exchange and cash crisis have caused government to consider desperate measures
The move towards cryptocurrency may seem a bit uncharacteristic for the Venezuelan government, however financial problems in the country may well be responsible for these measures. Eugenia Alcalá Sucre, the founder of Dash Caracas, says the look towards digital currencies comes as a result of a liquidity crisis with exchanges:
Venezuela’s government and, hence, its people, has a serious problem regarding currency exchange. There is an exchange control, the government is the only one authorized to legally buy or sale USD in our country, and now that USA has banned the government, they find themselves without liquidity. They even talk about starting to use “rupias” and “yuanes” as official exchange currency, because they do not have USD anymore.”
Additionally, according to Alcalá tight restrictions on cash withdrawals have further exacerbated the currency crisis:
“Also, there is another serious problem. Cash! There is not enough cash for all Venezuelans, the banks have set very narrow limits of cash withdrawals. For example, I can only cash a check FROM MY OWN BANK ACCOUNT of VEF 20,000.00. That equals around 0.7 USD.”
Typically in countries with tight financial controls, government actors tend to be hostile to cryptocurrencies due to their tendency to be difficult to regulate and control. Alcalá believes that this difference in attitude is caused by desperation, though any officially-endorsed blockchain solution would likely be state run:
“I think they are in desperate need of some financial solutions, and that is why they are considering it. But also I think they will try to have as much power and control as they can. In the article by Criptonoticias is very clear they are thinking of launching they own blockchain, I do not think it would be a decentralized one.”
Good for Dash’s continuing expansion in the region
Alcalá sees the state interest in cryptocurrencies as a net positive for Dash, which is well-positioned in the country and can only take advantage of newfound awareness:
“I think it is good, because Dash has better features for us Venezuelans than any other currency that currently exists, and of course, people will prefer a free currency than a government-controlled currency. But if the government officially begins using cryptos, people will be learning about that massively and quickly. So, because of the good reputation of Dash thanks to our growing community in Venezuela, we can capitalize that upcoming boom.”
Dash Caracas has a series of conferences planned to occur every month to educate the local business community about Dash. The first of these drew over double the projected number of attendees. A budget proposal to fund additional conferences was recently passed with a wide margin.