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Venezuela’s failing economy has often barred the country from the global financial system. Over the last few years, President Maduro has been turning to cryptocurrency to savor the failing economy.
The South American country has been at the forefront of cryptocurrency adoption, with several projects in play. The recent move by the government is accepting bitcoin for passport payments.
The news hit the country by storm after a twitter user put out a screenshot of the government website, showing cryptocurrency as one of the payment methods for the passports.
Negative Reactions From Venezuelans
While many people may interpret this as a giant leap towards mass crypto adoption, Venezuelans did not seem too excited by the news. From the replies on the tweet mentioned earlier, it was clear that some thought it a hoax. One user even called it wishful thinking to believe that it was an important step in bitcoin mass payments.
Another Venezuelan on Reddit coined it a bittersweet moment, saying that although bitcoin was being used for what it was intended for, the authoritarian government was probably using this method to hurt anyone who would oppose them.
No Other Option
From the government site screenshot posted on Twitter, it is evident that citizens cannot use credit cards such as Visa and Mastercard to pay for their passports. This is not surprising since most of the credit card companies are barred from doing business in the country.
In September of last year, the US treasury Department barred continued business in Venezuela by Mastercard, Visa, and American Express, as from March 2020. The decision was made as part of sanctions to force Maduro out of office.
In 2018, the Venezuelan Government launched its oil-backed cryptocurrency, Petro. The government put in place measures to force citizens to pay for passports using Petro, a move that failed drastically. The new prices were set at two Petros and one Petro for original passports and an extension, respectively. The inflated prices barred most citizens from accessing the passports, seeing as they were four times the minimum monthly wage in the country.
It is, therefore, not surprising that most citizens weren’t too thrilled by the new development. One twitter user commented that it was just a new way to finance the authoritarian government. At the same time, another added that the barred credit companies left the government without any other option.
The politics behind it aside, we cannot ignore the fact that if successful, the move to accept bitcoin payments could significantly aid mass adoption. Venezuela is quite favorable to cryptocurrency use, and the CEO of Dash Core Group, Ryan Taylor, calls it the second-largest market for dash crypto.
Therefore, we can only wait and see whether the country will allow other crypto payments and whether other states will follow suit.