According to reports, Venezuela has tied its new monthly minimum wage, equal to about $28, 50% to the Petro, the country’s cryptocurrency, which in many ways acts like a CBDC. The crypto is built on the DASH blockchain and issued by the government, which issues pension payments via Petro.
“It has always been clear what Venezuela aimed to do with the Petro, attempting to utilize the value of its oil reserves as a way to prop up its economy against sanctions, which is much the same argument that some are making right now about Russia. Venezuela’s attempt has failed, and Putin’s won’t be much more successful. Even though the concern in Russia isn’t tied to a national crypto, the fact is that the Russian economy is far too large to be able to run payments through the existing crypto financial structure,” said Richard Gardner, CEO of Modulus, a US-based developer of ultra-high-performance trading and surveillance technology that powers global equities, derivatives, and digital asset exchanges.
“Let’s not forget that the Venezuelan government has supported acts of terror committed by FARC, and it has had a strategic alignment with Iran, a state sponsor of terrorism. In the not-so-distant past, Venezuela was a beacon of economic freedom. After taking on a democratic government, it was routinely among the wealthiest countries in South America before Perez was elected in 1973. Now, it continues to edge further to the fringe, and it thinks that the use of digital assets will save the economy. It is clear that its experiment simply isn’t working,” said Gardner.
“Cryptocurrencies were built on a foundation of economic liberty. While regulators have taken strides to make the industry safer, it is still a beacon of economic freedom. Just look at how it has been used in Africa and, lately, Ukraine. Investors in many African countries have used cryptocurrencies as a hedge against extreme inflation seen in their own national fiat currencies. Now, donors from across the globe have come together to send donations directly into Ukraine, bypassing the need to get donations through middlemen and bureaucratic red tape. Digital assets were designed to offer this kind of economic empowerment,” noted Gardner.
Modulus is known throughout the financial technology segment as a leader in the development of ultra-high frequency trading systems and blockchain technologies. Modulus has provided its exchange solution to some of the industry’s most profitable digital asset exchanges, including a well-known multi-billion-dollar cryptocurrency exchange. Over the past twenty years, the company has built technology for the world’s most notable institutions, with a client list which includes NASA, NASDAQ, Goldman Sachs, Merrill Lynch, JP Morgan Chase, Bank of America, Barclays, Siemens, Shell, Yahoo!, Microsoft, Cornell University, and the University of Chicago.
“It is important not to be fooled by what’s happening in Venezuela. We can’t allow tinpot despots to utilize our industry to rebrand their own failed ideologies. We must showcase the real use cases of cryptocurrencies which have improved the quality of life in many places. What’s happened in Africa and the current influx of donations into Ukraine… that illustrates the real power of decentralized finance,” said Gardner.