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Petro vs cash: Venezuela’s crippled economy

Categories : Cash covers a broad range of transactions, Cash is universal
March 6, 2018
Tags : South America, Venezuela
Although Venezuela might be the first country to launch a digital currency, it is not helping ordinary citizens who find it difficult to carry out ordinary daily purchases due to the tragic unavailability of cash.
Communication Team / Equipo de Comunicación

This post is also available in: Spanish

While Venezuela’s government pushes the sale of its oil-backed cryptocurrency, the petro, ordinary citizens are struggling to get access to any kind of money. In fact, the cash shortage is so critical that it has caused the appearance of a new type of informal job: the cash delivery man. These human ATMs are making a better living now than ever thanks to the cash shortage, with their sky-high margins reaching up to 100% of the cash delivered.

Writing for Bloomberg, Andrew Rosati describes ordinary Venezuelans’ daily ordeal of gaining access to cold hard cash – and the exorbitant cost linked to it – even for people like himself that are generally equipped with other payment methods like cards. Indeed, some of the most mundane transactions like paying for gas or buying a cup of coffee on the street require cash – a hard-to-come-by commodity in inflation-ridden Venezuela. And because of the government’s dire financial situation, it has become too expensive to print more money leaving all citizens, but particularly the most vulnerable, at the mercy of a new fleet of middlemen practicing excessive fees for their services.

Regardless of how worthless some of the lower denomination bills have become, cash is proving to be an invaluable asset. Yet, the government’s inability to make more of it available is unfortunately resulting in the creation of a new profession and a new grey area in the economy.

This post is also available in: Spanish