Nicolas Maduro, president of Venezuela, stated the country could
offer cryptocurrency-based loans to the agricultural sector, in
addition to the traditional loans in several fiat currencies. He also
stated that Venezuela has worked with petro and other cryptocurrencies
for three years, pioneering the use of this kind of asset in Latam.
Government Hints at Offering Cryptocurrency Loans in Venezuela
Maduro hinted
at the possibility of giving loans in cryptocurrency to the
agricultural industry in an announcement made in a cabinet meeting last
Thursday. He stated the country would look for new ways to finance
domestic agriculture and also stated these loans would feature low
interest rates to benefit farmers. Elaborating to his ministers, Maduro
noted:
I ask you personally to lead the public banking sector and summon the
private banks to multiply loans and financing under the mildest
conditions for all food producers in the country.
The proposal also introduces the idea of giving these loans in
several fiat currencies, such as euros and even the Chinese yuan. While
Maduro mentioned Venezuela’s own cryptocurrency, the petro, he also
stated that they will work with all cryptocurrencies, as the government
has been doing for three years now.
An Escape From the Bolivar
Maduro’s shift to cryptocurrency signals a deficiency in the strength
of Venezuela’s own fiat currency, the bolivar, which has been quickly
losing ground against the dollar, which has become the de facto currency
in the country. Just recently, on June 20th, the bolivar lost more than 10%, and now that loss is closer to 20%, according to popular dollar price indexes.
This is why the government is considering redenomination
of its currency, slashing six zeroes from the current figure. This
would facilitate the task of calculating taxes and making large
payments, which with today’s exchange rate result in very big numbers
difficult to work with.
This is not the first time the Venezuelan government has turned to
cryptocurrency to try to improve its economic standing. Venezuela was
one of the first countries in Latam to develop a sizable Bitcoin mining
community even before the activity was regulated. Also, Venezuela was a
pioneer in cryptocurrency adoption, with the launch of one of the first
state-sponsored cryptocurrencies, the petro. Maduro stressed
this idea in an interview given to Bloomberg on June 22 amidst the big
reaction El Salvador elicited when it made bitcoin legal tender.
source link : https://news.bitcoin.com/venezuelas-maduro-wants-to-offer-crypto-based-loans-to-agricultural-producers/
