Amidst a deepening economic and social crisis and a mass exodus of its citizens, Venezuela enforces payment for the passport by the state-backed cryptocurrency Petro.
“Pay by Petro” Says the Government
According to figures provided by the United Nations, it is estimated that 5000 Venezuelans are leaving the country every day to escape the hardships. The country is facing one of the worst economic crises with hyperinflation touching 200,000% and the local currency bolivar depreciating by 99% in 2018. There is an acute shortage of food, water, power, and medicines. Prices have been doubling every 26 days.
Apparently, 2.6 million people have fled the country to other neighboring nations. To make things worse, starting next month, people need to pay for passports in the recently launched government backed cryptocurrency Petro.
The announcement was made by vice-president Delcy Rodriguez in a televised press conference from Caracas on Friday. While a new passport will cost two Petros (7200 Bolivars or $115), renewal is going to cost one Petro. So, to get a passport one would need to shell out four times the national average income.
The Endless Wait for Passports
Currently, to get a passport, people have to stand in long queues for days to apply and the time to get one can run into months. The scarcity of materials and corruption have made the process difficult. The new rule will make traveling out of the country difficult for the citizens who are already cut-off from the rest of Latin America. Many airlines including Avianca, LatAm Airlines, United Airlines, Aeromexico and Deutsche Lufthansa have stopped flights to Venezuela.
President Nicolas Maduro, last week in a televised address had announced the launch of the oil-backed digital currency. The cryptocurrency will go on sale for the public on the 5th of November. Venezuelans will now have to buy the crypto-asset to be able to apply for the passport.
New Migration Police
Rodriguez also announced the creation of migration police. “The migration police is born to tend to the 72 (ports of entry) that exist at borders, ports and airports,” Rodriguez said.
The vice-president did not elaborate upon the role or the structure of the new force. Venezuela shares a 2200 Kilometres long porous border with Colombia, which reportedly is used by many to leave the country illegally. Currently, the border is secured by the National Guard soldiers.
The government of Venezuela seems keen to enforce the adoption of the state-backed cryptocurrency. Earlier in August, President Maduro had mandated all local banks to adopt Petro as a unit for accounting. This move also appears to be a step intended to stem the growing exodus of Venezuelans that is being called as the worst ever human migration in Latin America. However, the hardships that the citizens are currently facing is going to make the implementation a painful rather than a smooth one.
Do you think that the move by the Venezuelan government is the right way to promote the adoption of digital currency? Let us know in the comments below.
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