Venezuela's New Cryptocurrency Is 'Dead on Arrival'
*By Amanda Weston*
Faced with a financial crisis, Venezuela has turned to cryptocurrency to fight rising inflation. But Eduardo Gómez, head of support at [Purse](https://purse.io/shop), said it may not be the best solution.
"The Venezuelan government is really now in a desperate situation," Gómez said Tuesday in an interview on Cheddar. "They're trying to get cash. They're trying to get money from international markets, and due to the U.S. sanctions, they're not able to do so."
Venezuelan President Nicolás Maduro outlined policies for the new digital currency, the petro, last Friday. One unit would equal the price of one barrel of oil, about $60 dollars, effectively devaluing the nation's existing currency, the bolivar, [by 96 percent](https://www.reuters.com/article/us-venezuela-currency/maduro-orders-96-percent-devaluation-in-hyperinflation-stricken-venezuela-idUSKBN1L22EZ).
Gómez said the government is trying to minimize the impact of economic sanctions from the U.S. It's an understandable priority ー The International Monetary Fund [estimates](https://blogs.imf.org/2018/07/23/outlook-for-the-americas-a-tougher-recovery/) inflation in Venezuela will reach 1 million percent this year. But Gómez said success for the latest petro strategy is highly unlikely.
"So far it has been a total failure," he said. "There's no real token out there. There's no real system in place. The technology has not been created yet. As, of now, it looks very bad for the government."
Venezuela's own parliament [believes](https://www.cnbc.com/2018/08/20/venezuela-is-pegging-its-economic-recovery-to-a-cryptocurrency--thats-widely-considered-a-scam.html) petro is being used illegally, and ICOindex has [labeled the currency a scam](https://icoindex.com/profile/petro-ptr).
Among the other moves announced by Maduro: raising the corporate tax rate, increasing previously-subsidized gas prices, and hiking the minimum wage by 3,000 percent.
Gómez pointed out that the current minimum wage, on which 70 percent of Venezuelans live, is about $1 per month. Such a low salary is the biggest hurdle for cryptocurrency adoption, Gómez said, since so many residents have barely any savings.
"Pretty much, petro is dead on arrival, as of now," Gómez said.
For full interview, [click here] (https://cheddar.com/videos/venezuela-looks-to-cryptocurrency-amid-financial-crisis).
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