Make Venezuelans Rich: Tokenize Venezuela

Some Venezuelans are starving. Yet, the country has over 180 metric tonnes of gold. That's about 6.6 million ounces, worth around 8.3 billion US dollars.

No one would be starving

With around 31.7 million people, there are about 0.2 ounces of gold for every citizen of Venezuela. Imagine if Venezuela tokenized their gold and distributed it to the people. Every citizen could receive 1 Venezuelan Gold Token (VGT) redeemable for 0.2 ounces of gold. Imagine if Venezuelans could not only redeem their 1.00000000 VGT for physical gold but also trade it electronically for foreign currency, digital assets, goods and services. VGT would be a top 5 cryptocurrency at inception. The market and infrastructure that would grow up around the asset could move Venezuela from last to first in financial technology. Foreign goods and services would flow into the country; trade would be sparked; entrepreneurship revived; and, no one would be starving. International creditors might have to take a haircut and the authoritarian regime might lose a bit of control. But, are we really going to worry about the credit of despots and the profits of international creditors at a time like this?

Photo by Dr. Livia Machado

The government of Venezuela should actually be able to salvage its credit and pay all debts in full, however. Venezuela has a resource that dwarfs its gold reserves: 300 billion barrels of proven oil reserves, worth around 10.5 trillion US dollars (in the ground!) at today's prices. That's $330,000 worth of oil for every citizen of Venezuela. If Venezuela proved the stability of Venezuelan Gold Token and the trust-worthiness of its new financial sector, the groundwork would be laid for Venezuela to lead the world in financial technology. Venezuela could then unleash Venezuelan Oil Token (VOT) to its citizens as not only a financial instrument but an instrument of governance. Staking the token could allow holders to vote on how to exploit the oil (or not), who to partner with, who would manage the organization, how much they got paid, etc.

If you want to socialize something, why not start with the central bank's gold reserves?

Venezuela could be one of the richest countries on earth per capita with a thriving financial sector in 5 years. Ironically, central planning in the name of socialism maintains a monopolistic grip on Venezuelan resources and prevents the people of Venezuela from benefitting. If you want to socialize something, why not start with the central bank's gold reserves?

Now would be a great time to "buy the dip" and provide some liquidity for the people of Venezuela. Unfortunately, Venezuela's problems stem from a disastrous lack of financial freedom preventing investment in the country. Decentralizing the resources of Venezuela and putting them directly in the hands of the people would be a bold experiment. Would it be socialist wealth redistribution or free market capitalism?

Any revenue generated by this post will be donated to charity to alleviate childhood hunger.