To address the high inflation of the Venezuelan currency, the Central Bank of Venezuela stated that the CBDC issued would withdraw the six-zero adjustment and would use the Short Message Service (SMS) exchange system to facilitate public use.
Venezuela affirmed that the revaluation of its CBDC will not affect the value of the country’s legal currency, the Bolivar, and said that:
The bolivar will not be worth more or less, to facilitate its use, it is being taken to a simpler monetary scale.
Since 2016, Venezuela has suffered from hyperinflation caused in part by President Nicolas Maduro’s controversial leadership with his money-printing policy.
It is reported that in 2020, the annual inflation rate is estimated to be around 2,300%. Forms of help and assistance are needed to face the country’s ongoing economic crisis. Due to the devaluation of the Venezuelan bolivar, Venezuela, which registered a high rate of inflation, has also seen its citizens turn to Bitcoin as a hedge.
Cryptocurrency activity has always been a widespread phenomenon in Venezuela. The government of Venezuela, led by Nicolas Maduro, issued its cryptocurrency Petro in February 2018.
According to the government, Petro is backed by oil and mineral reserves to support the devaluation of the Venezuelan bolivar and circumvent US sanctions.
In addition to Venezuela’s declaration of launching its central digital currency this year, South African country Lebanon will also revealed that its central bank (also known as Banque du Liban) may launch a digital currency in 2021, according to Central Bank of Lebanon Governor Riad Salameh.
Source: Blockchain News