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Venezuela Will Launch Digital Bolivar in October Banco Central de Venezuela is rolling out a central bank digital currency (CBDC) in October and will launch an SMS-based exchange system to facilitate its use. http://www.bcv.org.ve/comunicado-bolivar-digital

On October 1, the Central Bank Of Venezuela slashed six zeroes from the currency, effectively making 1,000,000 Bolivares just 1 Bolivar now, to make payments and currency handling easier. The measure was announced in August, where the central bank announced it was changing the name of the currency to the "Digital Bolivar," which sparked speculation about a possible issuance of a central bank digital currency (CBDC) in the country. But the bank did not present any reports in this regard and instead announced the issuance of new bills to complement the redenomination plan.

"The Central Bank of Venezuela announced the new redenomination plan for its fiat currency called "Digital Bolivar." This new proposal seeks to simplify transactions by slashing six zeroes from the current value of the currency. While it is called digital, it has nothing to do with the proposal of a new central bank digital currency (CBDC), but it claims to have the development of a digital economy in the country as its objective."

Perhaps the chaos in Venezuela will be remembered for fusing-if only in theory-the technological and financial ideas that could someday allow us to link volatile resource prices with risky development to promote the economy's general welfare.

Circle, which along with Coinbase issues the USDC stablecoin, is coordinating with the US government and Latin America crypto exchange Airtm to route aid for Venezuelan healthcare workers through the Latin American country's government in exile. The US Treasury and Federal Reserve releases seized funds to the exiled government's account at a US bank. The exiled government then uses those funds to mint USDC. The USDC is then sent to Airtm Once the USDC stablecoins hit Airtm wallets, they go to Venezuela healthcare workers in the form of AirUSD, Airtm's own fiat-backed stablecoin. Recipients can then withdraw at banks, send the funds, or spend them online.

"Throughout Venezuela's economic crisis, we saw images of ordinary Venezuelans tossing their useless bolivars in the streets. That is what happens when money has lost all meaning; it is in jeopardy of becoming a commodity when it is supposed to be a scarce resource. There are a million reasons why the U.S. will never meet the same fate as Venezuela, but you still don't want to tamper with people's perception of the value of money. After you throw a few trillion dollars around, people start to believe that it's all a big joke."

"Venezuelan customers say that making their payments for Zelle in dollars is "easy and fast" in a context of economic crisis and current service failures."

Despite the apparent complexity, Fei's mechanism is based on a similar principle to most fiat currencies, where central banks often use their own reserves of gold and foreign currencies to back their currency's value during periods of strong selling pressure. Direct restrictions on selling are also not new, with countries like Lebanon, Venezuela and Turkey offering recent examples of enacting stringent capital controls in a bid to stabilize their currency's value.

Venezuelan President Nicholas Maduro announced that the Christmas bonus of the country's retirees and pensioners will be paid to them in the national cryptocurrency Petro.

Venezuela President Maduro announced that next week there will be an airdrop of 0.5 PTR ($30) to eligible citizens who register with the Petro App.

According to the Venezuelan government, millions of families have used the petro, the country's national digital currency, to pay for goods and services. As shoppers rush to spend their coins, merchants are reportedly struggling, effectively forced to sell goods at a deep discount. At least one merchant is said to have been arrested.

Venezuelan central bank officials have reportedly summoned executives from a handful of local financial firms to discuss plans to create a clearing and settlement system in U.S. dollars starting next year. It would also allow banks to offer loans in dollars, which could boost a moribund local credit market, two of the people said. The local bolivar currency would co-exist in the banking system.

Circle, an issuer of stablecoin USDC, belatedly announced that it had partnered with the opposition Guaidó government to deliver financial aid to Venezuelan health care workers. Circle says it helped to get million of dollars to Venezuelans by leveraging "the power of USDC...to bypass the controls imposed by Maduro over the domestic financial system, and stablecoins have now become a tool of US foreign policy. But if you pick through the transaction chain carefully, USDC's role was trivial and that leg of the transaction could have been done via Fedwire, the Federal Reserve's large value payment system.

Venezuelans are digitally dollarizing using Zelle, a U.S.-based payments network that allows anyone with a U.S. bank account to instantly transfer funds to another U.S. bank account for free. Although Zelle is meant for U.S. usage only, Venezuelans have repurposed the network as a way to make dollar payments among each other. Large Venezuelan supermarket chains have enabled Zelle as a form of payment, and cafes, restaurants and taxis accept it. But business and commercial use infringes on Zelle's terms of service, which specifies that its network is intended only for personal use. Wells Fargo has notified many Venezeulan account holders their connection to Zelle will be terminated, so the game may soon be over.

According to the World Bank, Latin America's formal remittance market is around $96 billion. But traditional services like Moneygram or Western Union can come with high commissions, unfavorable exchange rates, limited office hours, long transmission times and daily exchange limits. Crypto remittances are a different story. For example, money can be sent from Venezuela to family members in Colombia and Spain using the peer-to-peer platform LocalBitcoins. These transactions are often faster and cheaper than their traditional finance counterparts, with fewer steps to send money. Crypto remittances organized on messaging platforms like Whatsapp, Telegram and WeChat can be even more competitive.

Venezuela's national cryptocurrency, the Petro is set to cease operations on January 15. The Petro was launched as an oil-backed cryptocurrency in 2018 with the goal of helping the country evade U.S. sanctions, but it failed to gain widespread adoption throughout its existence. Domestically, the Petro was never declared legal tender, meaning that its acceptance was not mandatory. the Petro was not a central bank digital currency (CBDC), despite speculation in 2019 that the central bank would create one.

Avalanche is launching a Visa Card that will allow cardholders to spend their digital assets directly from their wallets without the need to convert the assets into fiat currencies. The card will allow owners to complete payments using digital assets in any location or jurisdiction accepting Visa. It will come in the form of a self-custody wallet with a unique address per asset, in come in both physical (card) and virtual (app) form factors. The Avalanche Card will initially be available only to individuals that are residents of countries in Latin America and the Caribbean, except residents or citizens of Cuba, Nicaragua and Venezuela. Citizens of Russia, North Korea, Syria, Iran, along with the regions of Crimea, Luhansk and Donetsk are not eligible to sign up. https://x.com/AvalancheFDN/status/1848470963672711543

Russian Presidential Aide Yury Ushakov announced that Belarus, Bolivia, Indonesia, Kazakhstan, Cuba, Malaysia, Thailand, Uganda and Uzbekistan will become BRICS partners on January 1, 2025. These would be in addition to the existing member countries: Brazil, Russia, India, China, South Africa, Iran, Egypt, Ethiopia, and the United Arab Emirates. In addition, over two dozen more countries have shown interest in a systemic dialogue with BRICS: Azerbaijan, Bahrain, Bangladesh, Burkina Faso, Cambodia, Chad, Colombia, the Republic of the Congo, Equatorial Guinea, Honduras, Laos, Kuwait, Morocco, Myanmar, Nicaragua, Pakistan, Palestine, Senegal, South Sudan, Sri Lanka, Syria, Venezuela, and Zimbabwe. https://tass.com/politics/1892171