According to the economist from Venezuela Professor Aaron Olmos the adoption of cryptocurrency in Venezuela can play a significant role in the recovery of the economy of this country.
Olmos analyzed the reasons for the current dependence of his country on the US dollar. He passionately defends the benefits of cryptocurrency.
In his new interview with CoinDesk, Olmos discussed the problems of the current economic situation, also focusing on the discounted Bolivar, which is used as the official currency despite the existing alternatives. In his opinion, the current situation is a consequence of decades of poor economic management which led to a crisis, while the use of cryptocurrency in the country is accelerating as the cost of the bolivar decreases.
He said “We are in a difficult situation, because“ good money ”- dollars or cryptocurrency – are available, but they are few, because people tend to keep them and not spend. On the other hand, the government is still striving to use “bad money” – bolivars ”.
“In this situation, prices for goods and services are distorted, because at the present time in the domestic market, the cost of production is actually calculated in dollars. Everyone knows that the Bolivar is the official currency in circulation, but the actual valid currency is the US dollar.” Olmos explains.
According to him, the answer to the economic problems of the country could be the introduction of a double circulation system, as it was in the 90s in Brazil – provided that production in the country resumes and new investments will be received. He believes that cryptocurrencies and a bolivar could simultaneously work in trade.
“Given the current conditions in which we need an alternative element of trust, there is nothing better than cryptocurrency. In general, the economic policy of the government is aimed only at returning the cost to the bolivar, and the power – to itself, ”said Olmos.
According to Olmos, the current Constitution of Venezuela does not exclude the possibility of using cryptocurrencies for payments, “if at least temporarily give them space and come to strengthen the bolivar.” He also does not exclude that the Bolivar may eventually become “digital”.
Olmos said that there is an “economic plan for 2019–2025, which includes the blockchain and cryptocurrency.” although this document has not been published, and no one has seen it yet.