At the beginning of October, the digital bolivar came into force in Venezuela, the new denomination of the fiat currency of the Caribbean country. While the name is misleading, it is not a central bank digital currency (CBDC), but can it be?
To answer that question, . spoke exclusively with the computer engineer and CEO of Blokchain Hub Venezuela, Luis Gilberto Caraballo. He maintains that it is possible to bring the currency to CBDC, as long as a blockchain is created on the digital bolivar “to make it transparent.”
He is optimistic when considering that the bolivar could become a “digital currency backed by the central bank”, but warns that the “light handling” of the concept of digital asset at the government level complicate the task and “generates confusion” in the population.
Therefore, the expert believes it is essential, to advance in this sense, having to “clean” these conceptual aspects. In addition, from your perspective, you have to educate in Venezuela on the subject of cryptocurrencies and blockchain, as well as creating educational centers where technology is used, all for the sake of converting the bolivar into a digital currency.
“I would insist on the creation of several academies (…) and with the bolivar I would try to do the work on blockchain to make it reliable, transparent.”
Luis Gilberto Caraballo, Venezuelan engineer expert in blockchain.
And is there the infrastructure for a Venezuelan CBDC?
Asked whether Venezuela currently has the necessary infrastructure to sustain a digitized bolivar, Caraballo stressed that it did not, but defended that it is something that “is being built”, since countries “do not launch that (the CBDC) from one day to the next.”
For this, he cited the examples of the Bahamas, whose project, the Sand Dollar, has been developing since 2017; as well as China, where the digital yuan has been studied since 2018.
And returning to Venezuela, he clarified that in that country there is already a “path traveled” on the issue of virtual currencies and that he does not believe that everything is wrong. “It’s just making some adjustments and changes,” he said.
“It’s not just the CBDC, it’s the ecosystem, the regulation, what’s behind it. It is a complete structure that must be created for the commercial, public, exchange and services areas. This, so that it has a much larger capacity. If it is not done that way, there will be elements that cause short circuits in society ”.