Venezuela’s government is planning to move to a fully digital economy as hyperinflation has made worthless bolivar notes practically disappear, and dollarization expands through the local financial system.
In the wake of all the news I’ve been sharing recently concerning Japan’s and the European Central Bank’s interest to pursue digital currency, Venezuela may be added to that list as Maduro plans to move the government to a fully digital economy.
I’ve been making the case that with China’s testing and implementation of their digital yuan and the soon release of Facebook’s Libra, it will add fuel to the fire in this digital currency race.
Although this move is an abrupt one and may not be successful, if it is, Venezuela may be seen as an example to model for other nations going forward.
Venezuela’s Maduro Plans Shift to Fully Digitalized Economy
From MSN: The U.S. 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.
“They have a war against our physical currency. We are moving this year to a more profound digital economy, in expansion. I’ve set the goal of an economy that’s 100% digital,” Maduro said, adding that physical money will eventually disappear.
It’s the latest ambitious currency plan from Venezuela’s president, with no guarantee of success. In 2017, with the bolivar in freefall, Maduro vowed that the nation would create a cryptocurrency called the Petro, backed by reserves of oil, gas, gold and diamonds. The Petro launched in 2018; the U.S. called it a scam.
Venezuela’s currency has lost 99% of its value during three years of hyperinflation, forcing the country to issue higher-denomination notes that in turn become useless in record time. Inflation soared 5,790% in the last 12 months, according to Bloomberg News’s Cafe con Leche Index.
The largest note now in circulation, 50,000 bolivars, is worth about $0.04. The government has delayed plans to issue a 100,000 bolivar bill, which currently would be worth less than $0.10. Read More
Prophetic Implications
For the bible believer, why is the race towards digital currency something we should be paying attention to? The bible tells us in Revelation 13:16-17 that during the tribulation there will be a system put into place that will require every human being on earth to be a part of the “mark of the beast” system to freely engage in society (i.e. buy and sell). I don’t believe such a system could come into place if cash is still king.
With cash, purchases and the activities of an individual remains anonymous. However, in a completely cashless system, not only can your purchases and activities be tracked, you can also be shut out of it if deemed necessary.
For the believer this should once again serve as excitement as we see prophecies concerning the tribulation period cast a shadow into our time now! It only means that the rapture of the church is truly around the corner!
Sources
- Venezuela’s Maduro Plans Shift to Fully Digitalized Economy (January 2nd, 2020) – MSN