Venezuela has often sparked the curiosity of crypto-enthusiasts. Because of the country’s economic woes and out-of-control hyperinflation, cryptos have penetrated into Venezuela’s mainstream. And while the rate of adoption has been celebrated by the community, it doesn’t exactly come from a good place.
Over the past few weeks, Venezuela has once again become a geopolitical focal point, with superpowers across the globe weighing in on the country’s ongoing political crisis. And while hyperinflation wreaks havoc on its people, two men have risen to the main stage, and both are ready to fight to maintain their claim to power.
What’s happening in Venezuela?
Let’s rewind a bit. Over the past few years, there has been a lot of unsavory political behavior from the Maduro regime. From tampering and postponements to outright cancellations of regional elections, the country’s Supreme Court did everything it could to help the Maduro regime consolidate power.
While this was happening, the country fell into a spiral of economic woes, with oil production crashing, the bolivar practically dissolving and corruption within the governance growing even more blatant. So people took to the streets, beginning a string of protests that has come in waves since 2017.
Then, in early 2018, as foreign influences increased pressure on Maduro, the sitting president went to some unprecedented lengths to both rein in the country’s economic troubles and skirt the potential global repercussions of his actions. Related: Markets Open Flat Following Dovish Fed Interest Rate Decision
Beginning in February last year, Maduro promoted ‘el petro,’ a new state-sponsored cryptocurrency supposedly backed by oil. The goal of the campaign was to boost Venezuelans’ financial independence and bypass economic sanctions put in place by disgruntled westerners. After an embarrassing launch, or lack thereof, the idea fell on the backburner.
Faced with a new round of presidential elections, Maduro shifted his focus, launching a tirade against the opposition, barring many candidates from running, and even imprisoning some would-be challengers.
After securing his re-election in a highly-contested vote, however, Maduro jumped back on his crypto ambitions. By November, el petro had ‘re-launched’ and is even required for citizens to purchase passports and other government services – though there’s still not really any proof that it actually exists.
Enter Juan Guaidó
In less than a month, Juan Guaidó – a long time advocate and opponent against both Chavez and Maduro – has risen from obscurity on the international stage to the self-declared president of Venezuela.
Guaidó, for his part, has been very vocal against sitting president Maduro, including his “el petro’ plans. In a 2017 tweet, when Maduro’s plans for the state-sponsored cryptocurrency were initially revealed, Guaidó said “Maduro says that the Petro be backed by oil, that is to say it is not a cryptocurrency, it can be an electronic bonus with backup or any scam that nobody will believe”
Despite his outspoken disdain for ‘el petro’, however, Guaidó has been a long-time supporter of bitcoin, supporting local crypto endeavors as far back as 2014.
Guaidó’s crypto stances aside, his bold move into power has sparked a global debate that threatens already delicate geopolitical relationships between the world’s most powerful countries.
Teetering on the edge
As things escalate in Venezuela, the threat of military response, both domestically and internationally, is becoming increasingly real. Reports have already surfaced that Russia is sending military aid to the Latin American country, while just two days ago, during a press conference with U.S. National Security Advisor John Bolton, a poorly hidden notepad revealed the possibility of the U.S. sending “5,000 troops to Colombia.”
To further complicate matters, it has also been revealed that over 20 tonnes of gold, representing approximately 10 percent of Venezuela’s reserves, is sitting in a Russian aircraft in Caracas. The report comes just days after Maduro pled to the Bank of England to release some £1.2 billion worth Venezuelan gold to him, suggesting that the sitting president could be making a move to secure Russian military support.
A quick and peaceful resolution to this political bout would clearly be the best-case scenario for the Venezuelan people, but the situation is quickly growing more complicated as other world powers enter the mix.
Russia has been very vocal against U.S. intervention, but the U.S. doesn’t appear to be backing down.
By Michael Kern via Crypto Insider
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