In the latest sign that the international world is growing tired of dollar hegemony, Venezuela has stopped accepting dollars for oil. Additionally, as the citizens continue to struggle under a failing monetary regime, the use of Crypto-currencies is continuing to grow.
Earlier this week the Wall Street Journal reported that the government has been telling oil traders to no longer receive or send payments in dollars, and instead has begun converting invoices to Euros.
The move is said to be in response to the financial sanctions Donald Trump’s administration has placed on the Venezuelan government, such as banning U.S. companies and citizens from buying Venezuelan debt. In response, vice president Tareck El Aissami was quoted as saying, “To fight against the economic blockade there will be a basket of currencies to liberate us from the dollar.”
Interestingly, reports continue to emerge that one of the currencies that is facilitating this is Bitcoin. Which does not seem to be as if that’s the plan by the government, as the Maduro regime has been doing everything it can to crackdown on the crypto currency use.
However reports of the struggles citizens are facing in the downtrending economy has led many to just ignore the mandates and do whatever is required to feed their families.
Zero Hedge is reporting that, “between 2014 and 2016, the number of users on just one Venezuelan Bitcoin exchange skyrocketed from just several hundred to over 85,000 users.” Should the current regime continue to struggle (which based on their policies would seemingly be likely), there is reason to believe the crypto adoption trend will continue.
Possibly just as significant is to think about what might happen should this trend spread to other nations. While many find it inconceivable to imagine such an outcome happening to the dollar, when you strip away the indoctrination we’ve been fed for our entire lives and look at the actual financials, one can only wonder if what’s happening in Venezuela is a proxy for what might happen in the U.S. and elsewhere.
Fascinating times to be sure, and an interesting application of the difference between what should happen theoretically, and what people are actually doing.