Historical Background
This economic crisis didn’t just appear in 2013, the core of this problem dates back to 1998. This year is when Hugo Chavez was elected president of Venezuela, he main goal was to help fix the poverty problems among the country’s former citizens. At the time, there was a major issue with the inequality between the rich and the poor. Chavez took advantage of the country’s booming oil industry to create social programs to help balance the inequality amongst the rich and poor citizens. These actions led Venezuela into a spiral of groundbreaking debt within the country.
Chavez died in 2013, along with his presidency. He passed his power onto Nicolas Maduro, this started a fire in the majority of the citizen’s hearts. Thousands …show more content…
They have tried several ways to solve these problems; however, nothing has had a big enough impact to end it. One of the ways that they attempted to help the problem is with cryptocurrency. Cryptocurrency is a digital currency that is used to regulate currency aside from the central bank. The reason that they are trying this out is because their currency is almost worthless due to its collapsing economy. The type of cryptocurrency that they are trying out is called the petro,” which was sold for about sixty dollars for presale. The petros are backed by some of Venezuela’s reserves of oil and gold. Venezuela is especially known for having some of the largest crude oil resources in the world. Although, people predict that the cryptocurrency will help the Venezuelan economy, there are people that disagree. For example, the Trump administration has a financial sanction that prevents people that do business with the United States would not be allowed to invest in Venezuelan bonds, such as the cryptocurrency. Also, investors cannot buy petros with Venezuelan currency, the Bolivar. Therefore, it would be more difficult for a Venezuelan person to invest in the petro, but the central goal of it is to get other countries to invest in it. They are also unsure how the petro will be sold in the
This economic crisis didn’t just appear in 2013, the core of this problem dates back to 1998. This year is when Hugo Chavez was elected president of Venezuela, he main goal was to help fix the poverty problems among the country’s former citizens. At the time, there was a major issue with the inequality between the rich and the poor. Chavez took advantage of the country’s booming oil industry to create social programs to help balance the inequality amongst the rich and poor citizens. These actions led Venezuela into a spiral of groundbreaking debt within the country.
Chavez died in 2013, along with his presidency. He passed his power onto Nicolas Maduro, this started a fire in the majority of the citizen’s hearts. Thousands …show more content…
They have tried several ways to solve these problems; however, nothing has had a big enough impact to end it. One of the ways that they attempted to help the problem is with cryptocurrency. Cryptocurrency is a digital currency that is used to regulate currency aside from the central bank. The reason that they are trying this out is because their currency is almost worthless due to its collapsing economy. The type of cryptocurrency that they are trying out is called the petro,” which was sold for about sixty dollars for presale. The petros are backed by some of Venezuela’s reserves of oil and gold. Venezuela is especially known for having some of the largest crude oil resources in the world. Although, people predict that the cryptocurrency will help the Venezuelan economy, there are people that disagree. For example, the Trump administration has a financial sanction that prevents people that do business with the United States would not be allowed to invest in Venezuelan bonds, such as the cryptocurrency. Also, investors cannot buy petros with Venezuelan currency, the Bolivar. Therefore, it would be more difficult for a Venezuelan person to invest in the petro, but the central goal of it is to get other countries to invest in it. They are also unsure how the petro will be sold in the