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Continuing economic crisis in Venezuela: Expert comment from Dr Tom Long

Dr Tom Long, from Warwick’s Department for Politics and International Studies, comments on Venezuela's proposal for a virtual currency.

"Venezuela's proposal for a virtual currency is unlikely to stanch the country's economic bleeding. Rather, it is a signal of fiscal desperation. Government increases in the money supply -- printing money, essentially -- have been ever faster.

"As the value of the currency drops, conducting any transactions in cash has become exceedingly difficult. Purchasing power has collapsed. Already, most transactions are conducted electronically, but that has not helped. Venezuela introduced a new "strong" currency in 2008, but inflation has only gotten worse.

"The problem is not the currency, digital or otherwise, but fundamentally flawed economic policies and a lack of trust in Venezuelan institutions."

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