A Digital Dollar is Soft Power

Dateline: Woking, 4th May 2023.I read with interest that Venezuela’s national cryptocurrency, the Petro (PTR), ceased operations earlier this year. It was introduced with the goal of helping the country evade United States sanctions but failed to gain traction. The story caught my eye because Venezuela used to come up in talks about cryptocurrency all the time, with an underlying assumption that Venezuelans would prefer Bitcoin over their own hyperinflated currency or would adopt President Maduro’s Petro, created in 2017 and (supposedly) backed by Venezuela’s vast oil reserves. A fascinating cryptocurrency case study of a country trying to sidestep the might Dollar.ShareWhat the Zelle?The Petro didn’t get off to a good start and began trading for half its official value on the streets of Caracas. Meanwhile, as anyone could see, on those streets the restaurants, shops, supermarkets and even the street vendors not only accepted but preferred dollars in cash or by bank transfer. I wrote about this at the time when I was surprised to discover that shoppers could pay by Zelle in supermarkets in Venezuela but not in America! In fact Ecoanalítica, a macroeconomic analysis company that tracked 15,000 transactions in 10 different Venezuelan cities at the time, discovered that more than half were conducted in dollars and around one in eight were processed through Zelle. The sentiment on the streets in Venezuela and elsewhere seems unambiguous: people want dollars. Period.Subscribe nowI remember seeing in several places that bitcoin “number go up” on the back of the appointment of Javier Milei, a pro-bitcoin candidate, as…A Digital Dollar is Soft Power