Economic Problem in Venezuela
The economy of Venezuela is mostly based on the petroleum. According to 2014 data, total trade based on petroleum amounted to 48.1% of the country's GDP. On the other hand, exports accounted for 16.7% of GDP and petroleum products accounted for about 95% of it. Venezuela ranks sixth in size by oil production among OPEC members. Venezuelan economy growth steadily from 1950s to the early 1980s. During this period of time many immigrants came to the country, while the nation was enjoying the highest standard of living in South America. Following the the collapse of oil prices in 1980s, high dependency to oil resulted in progressive devaluation of the local currency and inflation skyrocketed. Highest figures reached 84% in 1989 and 99% in 1996, three years prior to Hugo Chávez taking office. The country is not self-sufficient in most areas of agriculture.
United States has been Venezuela's most important trading partner. United States was exporting machinery, agricultural products, medical instruments and cars to Venezuela. On the other hand, Venezuela is one of the top four suppliers of foreign oil to the United States. According to the International Energy Agency (as of August 2015), the production of 2.4 million barrels per day supplied 500,000 barrels to the United States. a8114e605fce85c7b030cfa966cad0c1.jpg There has been coups and strikes to knock over President Hugo Chávez. Venezuelan general strike of 2002–2003, was an attempt by the Venezuelan opposition to President Hugo Chávez to force a new presidential election. The main impact of the strike derived from the stoppage of the oil industry, in particular the state-run PDVSA, which provides a majority of Venezuelan export revenue. Chávez fired 20,000 seasoned employees mostly engineers, line managers and geologists. Therefore, efficiency of the production declined. Inflation exceeded 100% in 2015 which was the highest in the world and the highest in the country's history at that time. Inflation has hit its highest point in Venezuela, where the country’s currency is near worthless as people attempt to evacuate the increasing chaos.
Government led by the current President Nicolas Maduro, has been in recession since 2013 due to economic policy and oil price plunges. Nicolas Maduro hoped to offset the effects of the crisis by printing more currency. Printing more money worsened the situation and government achieved nothing but feeding the hyperinflation monster. Cryptocurrency as a Solution Venezuela launched ‘Petro’ in February, and it was billed as the world’s first sovereign cryptocurrency. It’s built on the Ethereum blockchain and intended to save the country from wild inflation and foreign sanctions. Unfortunately, it has lost its’ value nearly 10 times sharing the fate of almost all the cryptocurrencies. Despite the loss in value Venezuela takes another step forward to legitimize cryptocurrency usage.
President Maduro, announced the official launch of the national cryptocurrency Petro. Public sale of Petro will start on November 5th. Oil purchases in and out the country will have to be paid with Petro. This stipulation also relates to international airlines whose routes lies through local airports, as fuel for aircrafts will also be sold for Petro. Petro will also be used as the unit of account for local salaries, goods, and services as the national fiat Money which has been struggling with hyperinflation.
This is a great progress in terms of cryptocurrency mainstream adoption. Most of the population will start to use cryptocurrency for everyday monetary actions. Since most of the population in Venezuela suffers from poverty, cryptocurrency would enable these people to survive.I can’t tell if Petro will save Venezuela from the poverty since it is centralized and the government issued it do not have a clean record on currency management. On the other hand, cryptocurrency would save individuals from poverty. We know that cryptocurrency do not lose value in the long run. Right investment decisions based on strong technical and fundamental analysis would let individuals to obtain financial freedom.
It is not certain that if Venezuelan economy would be saved by Petro but, cryptocurrency would be the solution to the individuals
Problems of Cryptocurrency
There are problems associated with owning cryptocurrency. First of all, people are afraid of cryptocurrencies. Cryptocurrency is too high a risk to pursue. With it being largely unregulated and the countless scams we’ve seen over the last few years, that’s an understandable concern. The concern would be more severe for the Venezuelans who couldn’t afford losing hard earned money more than anybody else in the world. The other problem is buying cryptocurrency is a hard task and one needs to use several tools and platforms to achieve. There is a risk of losing funds if there is a failure in one of the necessary steps involved. HubrisOne Solution to Venezuela Although government promotes cryptocurrency utilization in the country, people will still need a reliable solution to introduce cryptocurrency in order not to risk their hard-earned money. HubrisOne, which is a mobile application by which users could do anything could be done with a call centre operator by phone banking. It has an integrated easy to use cryptocurrency wallet with API integration to exchanges which enables users to buy and store cryptocurrencies by using the application. It only requires a smart phone with an internet connection.
According to Conatel, 60% of the population in Venezuela (which was approximately 19 Million people) had internet access in June, 2017. On the other hand, 40,1% of the population (which is approximately 12,9 Million individuals) have smart phones according to Newzoo's Global Mobile Market Report 2018. This is a great opportunity for the Venezuelans to create a digital bank account using HubrisOne in GBP, USD and EUR currencies. After completing KYC and AML users will be able to use their digital accounts. There is no Sovereign Bolivar option for Venezuela yet but, I am sure founders are aware of the potential in the country and would consider adding it in the future.
HubrisOne built to be an easy to use application for cryptocurrency related transactions also. Users will be able to easily buy, store and sell cryptocurrencies. This feature will help Venezuelans to save their hard-earned money from decaying because of hyperinflation.
I was not able to find statistical information about unbanked people in Venezuela but considering the past 30-40 years of the country and taking the present inflation rates into consideration, a high percentage has got high possibility. These people would enjoy the benefits of having a digital bank account via HubrisOne.
Cryptocurrency has got the power to give people financial freedom. Being an early adopter increases this chance multiple times. Cryptocurrency is still in its’ infancy so there are many opportunities for those who buy in during these times. By providing cryptocurrency trading option along with a reliable well-known structure HubrisOne eliminates the risk factor for those who do not own cryptocurrency by manipulating their perception. Moreover, the simplicity to buy, hold and sell cryptocurrencies with HubrisOne, will enable more and more to adopt crypto. HubrisOne provides a unique opportunity for those who do not have any bank account and cryptocurrency. Venezuelans wouldn’t miss this opportunity.