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Venezuela to deduct six zeros from its currency to facilitate payments – Bitcoin News

The Venezuelan government is considering a new revaluation of its fiat currency. The proposal that is being studied would deduct six zeros from the inflation-hit bolivar. This will help companies process taxes and provider payments that are absurdly complex with today’s numbers. However, according to consulting firms, the dollar is the dominant coin in retail payments in Venezuela.

Venezuela will revalue its currency

The Venezuelan government is studying a mathematical revaluation of its currency, the sovereign bolivar, to make payments easier for large companies. This revaluation will subtract the six zeros, making it easier to calculate the payments leading up to the higher sum now. Although no official announcement has been made yet, Bloomberg Reported Three people with knowledge of the matter had commented on the subject.

The new measure comes to the aid of companies that had to make big payments in Bolivar. This will also help customers paying in Bolivar using POS terminals, who now have to swipe their cards multiple times due to system limitations. However, this measure shows that the government has failed to control inflation and devaluation of the currency. Bolivar is now trading at approx. 3,200,000 VES per dollar (or 3.2 renumbered VES per dollar).

Most of the payments in the country are now digital, so the government does not have to print many bills to replace the amount of cash in the market. according to some projections Created by Econometrica, a national consulting agency, only 1.9% of the money in the Venezuelan system is cash. The highest note is worth 1,000,000 VES, or about $0.30, and is only useful for paying bus fares.

not the first time

This is not the first time that Venezuela’s central bank has taken such a step. In fact, citizens have already gone through this process twice. First event of monetary re-change happened in 2008, and it subtracted three zeros from Bolivar. At the time, the country was in a very different position, with an annual inflation of only 20.44%.

the second conversion was applicable Not long ago, in 2018, and it removed five zeros from the currency. This time, Venezuela was in serious trouble, facing the onset of a hyper-inflationary process and sanctions that stifled economic growth. Around that time, the government launched petro, its official cryptocurrency, as an attempt to counter this situation.

This means that in less than 15 years, Venezuela will have deducted 14 zeros from its currency. But, without any effective measures to combat inflation, it only serves as a bandaid for some citizens. Affected from the current situation.

What do you think about the latest fiat currency revaluation in Venezuela? Tell us in the comments section below.

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