Key facts:
Every million bolívares now equals one bolívar, the local Venezuelan currency.
The Venezuelan currency is now called the digital bolivar.
The day has arrived: as of today, Friday, October 1, the third currency reconversion took effect since 2008 in Venezuela, whose economy has been submerged in hyperinflation in recent years.
This is the third conversion in 13 years in Venezuela. But it is already the second in just 3. In 2018, President Nicolás Maduro eliminated 5 zeros from the national currency, a victim of hyperinflation. Now, with history repeating itself, there are 6 zeros that are subtracted from the bolivar. In total, there are already 14 among the three reconversions .
With the new conversion of 6 zeros, the millions of bolivars that move daily become simple figures. For example, a US dollar that moved for more than 4 million bolivars in Venezuelan streets, now equals 4 bolivars with a few cents.
For accounting purposes, there are those who appreciate the measure, since any invoice included endless digits. The life of the accountants was being very cumbersome for it and now everything will be easier , recognized the accountant Rodrigo Bermúdez cited by AFP . As long as history does not repeat itself and in a few years it returns to the starting point.
Enter the night of this Thursday 30 September and this morning, Friday October 1, the banking systems were not working . The stoppage occurred to adapt the systems to the new denomination of the local currency, as reported by CriptoNoticias that had been announced by the executive vice president of Venezuela, Delcy Rodríguez.
Despite the already proven Venezuelan experience in currency reconversions, there has been a wave of business refusing to accept bolivars in the days prior to the change. Others even have announced that they will not accept payments in local currency until next Monday, October 4 anticipating possible problems with banking .
Heading to the digital bolivar
Vice President Rodríguez has emphasized that the reconversion has nothing to do with the value of the Venezuelan currency. Rather, it only seeks to facilitate accounting and simplify commerce in the country.
In Venezuela the bolivar does not It has only lost value at a rapid pace in recent years. It has also given up its position as a unit of account, although not officially. De facto, the dollar is now the currency that defines the value of products and services in Venezuelan streets.
Although the bolivar is still used for day-to-day trading, prices are set in dollars and people pay according to the exchange rate of the day, whether it is the official one that sets the Central Bank of Venezuela or those of the well-known parallel dollar that arises from various indicators, among which P2P trade stands out on the exchange of bitcoin Binance.
But even though the bolivar is still the most widely used medium of exchange, payments with the local currency are almost restricted in their all digital channels : payments with debit cards, bank transfers or the immediate payment system between banks known as mobile payment.
Precisely, the announcement or reconversion that President Nicolás Maduro did in August, included a new name for the Venezuelan currency: after bolívar, bolívar fuerte or bolívar sovereign, now comes the digital bolivar . However, neither Maduro nor any government spokesperson has explained what this digital nature of the currency implies .
Digitization of the bolivar: and the petro?
Rodríguez said recently during a televised event that the arrival of the digital bolivar will do, among other things, to digitize payments of public transport . This is, paradoxically, one of the few services where the bolivar in cash currently circulates in Venezuela, almost disappeared from daily transactions due to hyperinflation.
For the collection of public transport tickets, there will be a record through the Patria system, a platform used by the Venezuelan government for the allocation of vouchers, the distribution of gasoline at regulated prices and vaccination records or food combos delivery.
Despite the effort to transcend physical money , the conversion into Venezuela is accompanied by a new monetary cone, which includes a coin equivalent to 1 bolívar ( 1 million before the conversion) and banknotes of 5, 10, 20, 50 and 100 .
Little or The Venezuelan government has said nothing about the petro (PTR) in this context. The called cryptocurrency launched by Maduro remains with a very low profile among Venezuelans, who have found very few options to use the PTR beyond the payment of government services as the assignment of passports or other formalities.
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