Nicolas Maduro. (Photo: Jhonn Zerpa/Prensa Miraflores/dpa)

KUALA LUMPUR, Jan 29 — Venezuela is expected to switch to new digital payment options this year to substitute for cash for all economic activities.

The initiative, which was outlined by President Nicolas Maduro in his annual address to the nation from the National Assembly recently, will see the oil-rich state moving towards a 100 per cent (transaction) in digital forms.

“Maduro, in his address, referred to the process of incorporating the (US) dollar increasingly in commercial operations in the country and pointed out the repeal of the Foreign Exchange Law, which allowed the flexibility of mechanisms for the use of the dollar as a means of payment,” said Charge d’affaires of the Embassy of Venezuela in Malaysia, Morella Barreto Lopez, in a statement to Bernama.

She, however, highlighted the value of the bolivar as a currency, since 77 per cent of the country’s transactions were made digitally in Bolivar digital operations, and 23 per cent in US dollars, in cash.

According to the diplomat, the Venezuelan economy is not dollarised and that the problem is the lack of cash, prompting the government to encourage digital transactions.

“The use of the dollar meant an escape valve to the disappearance of the cash bolivar because the bolivar is the official currency of Venezuela.

“The (Venezuelan) president emphasised the permanence of the bolivar economy, within the contradictions and new realities that the economic situation has imposed,” she said.

According to Barreto, the president has indicated that the circumstances of the (United States) blockade, as well as the economic measures of his cabinet, have pushed the country to new economic relations between the state and the private sector, overcoming old rentier logic and promoting investment in foreign currency in the real economy by parts of these sectors as relief mechanisms, justified by the net fall in oil income.

In fiscal matters, she said, Maduro indicated that in the last three years, the fiscal contribution of the internal collection to public spending in bolivars doubled, from 23 per cent to 47 per cent, between 2018 and 2020.

“Today, despite the pandemic, practically half of the national budget is financed with internal taxes,” she said.

According to the diplomat, the Venezuelan president had also pointed out that the results in the fight against the COVID-19 pandemic have been the product of a “collective effort,” and recalled the stress placed on Venezuelan families due to the dynamics of social distancing.

Maduro had emphasised that national cohesion, awareness, and clear and timely state policy in handling the crisis made a difference in Venezuela, emphasising the trust placed in the actions of the state by the people.

Source: — BERNAMA