CBDC Petro fails in Venezuela: the future for all of CBDCs?

[LUCKMCFLY]

I think that the biggest failure of the Petro was since its launch, the whitepaper was something that did not convince us to go ahead, plus something that is controlled by the government was obvious that it would have no future, in some things what had to be done was launch the petro effectively in all the exchanges in the world, and not to say that this was the cryptocurrency of a country managed by people who are completely corrupt, the first thing that had to be done was a Petro that would show the faces of the rulers.

Furthermore, they looked for a team that was completely bad, but the worst thing was what they looked for to create it, a crypto that failed when it was supposedly backed by gold, precious stones and oil, is something that does not make sense in the slightest. That is what is said that was not managed correctly, that is as similar as if North Korea launched a crypto and pretended that it would be very successful, when everything is managed by the president there.

[MrSpasybo]

The realization and mass introduction of such technologies is still far away. Therefore, the simplest and most accessible method for mass consumers is to buy stable currencies such as the US dollar. This solution has a lot of advantages - simple, affordable, very easy to exchange the necessary part of the "stock", and in some cases even make payment in this currency. such a system works in many countries where tourism is a significant part of the economy, personally used both local currency and dollars - Turkey, Thailand, Dominican Republic, Indonesia, ....
This means that I can put in my purse the necessary amount of bills and be sure that at any point I will either pay with them or easily exchange them.

With cryptocurrency, such actions are unlikely

Yeah, USD is the most popular currency in global trade and national reserves because it is backed by the world's largest economy, the US. El Salvador also chose USD as a means of payment instead of issuing its own local currency. Anyway, compared to crypto, fiat is also more friendly and familiar to people.

I think that the biggest failure of the Petro was since its launch, the whitepaper was something that did not convince us to go ahead, plus something that is controlled by the government was obvious that it would have no future, in some things what had to be done was launch the petro effectively in all the exchanges in the world, and not to say that this was the cryptocurrency of a country managed by people who are completely corrupt, the first thing that had to be done was a Petro that would show the faces of the rulers.

Furthermore, they looked for a team that was completely bad, but the worst thing was what they looked for to create it, a crypto that failed when it was supposedly backed by gold, precious stones and oil, is something that does not make sense in the slightest. That is what is said that was not managed correctly, that is as similar as if North Korea launched a crypto and pretended that it would be very successful, when everything is managed by the president there.

There are too many problems with Petro and we could predict its failure from the very first days. The weak economy cannot be saved by a single currency in the hands of the government.

At least, Petro is also a case for us to see the nature of CBDC and its limitations in management and application. I hope other governments will learn something to adjust or abandon the CBDC strategy

[Captain Corporate]

There is really nothing that we could end up with which would diminish the power of dollar unless dollar itself gets devalued. However, there are plenty of things they can do to fix their economy. Cut excess spending on government stuff, try to not take too much taxes from the people, and whatever you get, try to invest into things that covers the bottom, building housing projects, paying poor people, may sound like a socialist move, but we are talking about a welfare nation anyway, so it wouldn't really be shocking that they would go down that route, it would not benefit them to be more liberal at this moment when nobody has any money at all.

[DrBeer]

There is really nothing that we could end up with which would diminish the power of dollar unless dollar itself gets devalued. However, there are plenty of things they can do to fix their economy. Cut excess spending on government stuff, try to not take too much taxes from the people, and whatever you get, try to invest into things that covers the bottom, building housing projects, paying poor people, may sound like a socialist move, but we are talking about a welfare nation anyway, so it wouldn't really be shocking that they would go down that route, it would not benefit them to be more liberal at this moment when nobody has any money at all.

One question is why on m any weakening of the dollar ?
I have been observing the topic of "fighting the dollar" for a long time. And even there are supposedly arguments, but when I ask the question - "show me a real argument why the dollar hinders and creates problems for your economy ?" there are no sensible answers! There are some slogans, but nothing more. And when trying to parse any argument, its supporter very simply comes to the realization that the dollar does not negatively affect the economy of his country. Yes, I agree that a cheap/expensive dollar can create some advantages for the U.S. economy, but it's competition! Make your currency as "tricky", make your economy so that the US buys something from you and has no alternative to your product....
In short, this whole "fight against the dollar" is mostly envy of the more successful and smart and weakness instead of efforts to improve their currency and economy.

[electronicash]

There is really nothing that we could end up with which would diminish the power of dollar unless dollar itself gets devalued. However, there are plenty of things they can do to fix their economy. Cut excess spending on government stuff, try to not take too much taxes from the people, and whatever you get, try to invest into things that covers the bottom, building housing projects, paying poor people, may sound like a socialist move, but we are talking about a welfare nation anyway, so it wouldn't really be shocking that they would go down that route, it would not benefit them to be more liberal at this moment when nobody has any money at all.

One question is why on m any weakening of the dollar ?
I have been observing the topic of "fighting the dollar" for a long time. And even there are supposedly arguments, but when I ask the question - "show me a real argument why the dollar hinders and creates problems for your economy ?" there are no sensible answers! There are some slogans, but nothing more. And when trying to parse any argument, its supporter very simply comes to the realization that the dollar does not negatively affect the economy of his country. Yes, I agree that a cheap/expensive dollar can create some advantages for the U.S. economy, but it's competition! Make your currency as "tricky", make your economy so that the US buys something from you and has no alternative to your product....
In short, this whole "fight against the dollar" is mostly envy of the more successful and smart and weakness instead of efforts to improve their currency and economy.

i think its mostly because when countries are sanctioned US confiscates their USD. there are several countries which their USD reserves were taken.
and for one reason above all. USD is not backed by USD. we all know that with Nixon.

i think this is why Russia and China are massively getting more gold much like how US government had started the Bretton Woods Agreement and they more than likely want to go back to gold standard.

[DrBeer]

1. As CBDC has already said many times - this is the worst evil that the crypto-world has produced. And we will regret this "heir" to the idea of freedom, independence, privacy... many more times. CBDC is all of the above, but diametrically opposite.
2. If we talk about Venezuela, as well as about any other country with not the best economy and not the most reasonable government, then I have to disappoint everyone - such economies will not be helped neither by CBDC nor bitcoin, nor, for example, by meteorites as a unit of account. Many people mistakenly think that replacing fiat currency with e.g. CBDC or bitcoin will save the economy ! NO ! This is a profound misconception and a fantasy. The economy is saved by... reasonable policy, reasonable management of the country, balanced economy, technology, and everything that generates competitive advantage of the country on the world market. And replacing some "paper wrappers" with other "virtual wrappers" does not change the situation and does not fix the economy.

Replacing fiat currency directly with CDBC is not the right result because an asset with unlimited supply will continue to create inflation. However, Germany managed to get out of the hyperinflation spiral by changing their currencies both after the first world war and after the second world war. Under normal circumstances, money tied to a valuable commodity like oil should have solved some problems. Unfortunately, Venezuela's failure has made me question ordoliberal economic policies.

1- Inflation is a natural and NORMAL process for a nation's economy and financial model. The lack of additional issuance is one of the problems why classical cryptocurrencies can neither replace fiat currency, much less save the economy. Just try to model the situation in a country that has no money issuance process ?  You will understand why without emission a real state in a modern economy cannot exist.
2. Germany got rid of inflation thanks to economic recovery. And yes, they had wild inflation - as an enthusiast of numismatics and bonistics, I can confirm I have a 10 and 100 billion mark bill in my collection
3. Unfortunately Venezuela did not have a liberal economy. And this is a consequence of Maduro's unreasonable policy
4. Tying the economy to natural resources is a bad idea. There are many examples where resources are plentiful, but the standard of living is third world countries. A resource-based economy is a very bad economy.  Venezuela has an ocean of oil and.... ?
Another "perfect" example is Russia. "40% of the world's natural resources" and so what? Poverty, degradation of the economy and the country as a whole, as soon as a resource, and a very demanded one at that, fell under sanctions. And poverty and degradation there since the Soviet times, believe a person born in the USSR

[trendcoin]

...

The biggest problem in hyperinflationary countries is the loss of confidence in fiat money. Therefore, the rate at which money changes hands increases in hyperinflationary countries. This pushes the economy into a spiral of hyperinflation. The only way out of this spiral is to change the currency because otherwise mass psychology cannot be managed. Germany first used the Reichsmark to replace the Papiermark, then the Deutschmark to replace the Reichsmark. That's why I thought Venezuela's currency move was the right move, but I was disappointed that it turned out badly. In fact, I agree with you, the fact that they are an isolated state and they don't adopt liberal economic models is also an important factor in this failure, but I was still surprised by this result as I always expected better performances from the commodity currency.

[DrBeer]

There is really nothing that we could end up with which would diminish the power of dollar unless dollar itself gets devalued. However, there are plenty of things they can do to fix their economy. Cut excess spending on government stuff, try to not take too much taxes from the people, and whatever you get, try to invest into things that covers the bottom, building housing projects, paying poor people, may sound like a socialist move, but we are talking about a welfare nation anyway, so it wouldn't really be shocking that they would go down that route, it would not benefit them to be more liberal at this moment when nobody has any money at all.

One question is why on m any weakening of the dollar ?
I have been observing the topic of "fighting the dollar" for a long time. And even there are supposedly arguments, but when I ask the question - "show me a real argument why the dollar hinders and creates problems for your economy ?" there are no sensible answers! There are some slogans, but nothing more. And when trying to parse any argument, its supporter very simply comes to the realization that the dollar does not negatively affect the economy of his country. Yes, I agree that a cheap/expensive dollar can create some advantages for the U.S. economy, but it's competition! Make your currency as "tricky", make your economy so that the US buys something from you and has no alternative to your product....
In short, this whole "fight against the dollar" is mostly envy of the more successful and smart and weakness instead of efforts to improve their currency and economy.

i think its mostly because when countries are sanctioned US confiscates their USD. there are several countries which their USD reserves were taken.
and for one reason above all. USD is not backed by USD. we all know that with Nixon.

i think this is why Russia and China are massively getting more gold much like how US government had started the Bretton Woods Agreement and they more than likely want to go back to gold standard.

Oya, I heard you. Now let's analyze the problem you mentioned ? For example, why were sanctions imposed or why were some funds blocked/seized? 
From what I know and see, it was a punishment for violating their commitments - international, partnership, criminal law, and international standards. So the claim to the US/EU in this case looks almost like "let's close the police, because they have some claims against me. And at the same time the courts - why do they cling to me and do not let me steal other people's things or beat up children on the playground? This is not the order !"
With pleasure I will listen to your counterarguments !

[DrBeer]

...

The biggest problem in hyperinflationary countries is the loss of confidence in fiat money. Therefore, the rate at which money changes hands increases in hyperinflationary countries. This pushes the economy into a spiral of hyperinflation. The only way out of this spiral is to change the currency because otherwise mass psychology cannot be managed. Germany first used the Reichsmark to replace the Papiermark, then the Deutschmark to replace the Reichsmark. That's why I thought Venezuela's currency move was the right move, but I was disappointed that it turned out badly. In fact, I agree with you, the fact that they are an isolated state and they don't adopt liberal economic models is also an important factor in this failure, but I was still surprised by this result as I always expected better performances from the commodity currency.

I will correct your answer a little bit, from the point of view of money substitution.  The replacement is carried out for one simple reason - it is necessary to remove "extra zeros on banknotes" from circulation. And the currency itself remains essentially the same, albeit with a different name. This is exactly what Germany did - they simply removed from circulation banknotes with unnecessary huge denominations, and replaced them with smaller denominations. They printed a new amount of "new" currency.
 
 
 
I.e. if, for example, there was 100,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000 units in circulation, then after the "exchange" the money supply will be 100,000,000,000,000,000 units, with the same number of assets in the country. The example is only for visualization of what I said.
This process has happened in many countries.