(Truth in Media) Venezuela’s ongoing, years-long financial crisis has continued to worsen, and the socialist nation’s real-world official currency, the bolívar, has plunged in a state of hyperinflation to around one-seventh the effective trade value of in-game digital gold from the massively-multiplayer online role-playing game World of Warcraft.
According to analysis by Fortune‘s Chris Morris, in terms of trade value in US dollars, World of Warcraft gold is worth 6.8 times more than the bolívar.
“Here’s how the math works out. Per Google, one U.S. dollar is worth 68,915 bolívar. Compare that to the price of WoW tokens, official in-game credits that can be used to extend a player’s play time or buy in-game items. Tokens can be bought with either $20 real world cash or sold for a fluctuating amount of in-game gold. One tracking service lists the current gold price of a token as 203,035 pieces. That works out to about 10,152 gold gaming pieces per USD,” wrote Morris.
It is worth noting that since Morris published his analysis on Monday, the bolívar’s official exchange rate has already dropped further against the dollar. One dollar is as of press time today worth 69,913 bolívar.
However, Venezuela’s government has enacted strict currency controls, limiting the ability of individuals to convert their bolívar into foreign currencies. For situations such as when companies need to import materials from other countries in order to produce goods, limits on currency conversion can hamstring their ability to produce goods, creating a significant demand for foreign currency exchanges on the black market. This causes the value of the bolívar to plunge even further in real-world terms.
Dolar Today, a currency valuation resource that factors black market value in its valuation of Venezuela’s currency, notes that the black market exchange rate for one U.S. dollar is 661,824 bolívar as of press time. At this valuation, World of Warcraft gold is actually worth 65 times more than the Venezuelan currency.
Venezuela has been in an ongoing financial crisis since 2012. Despite the fact that it has the world’s largest documented oil reserves, Forbes notes that Huge Chavez’ 2007 nationalization of the nation’s oil industry correlated with an oil production drop of 20 percent by the start of the 2012 financial crisis.
Reuters notes that 90 percent of Venezuelans currently live in poverty, and the average Venezuelan lost 24 pounds in body weight in 2017 due to hunger. A Miami Herald report found that significant numbers of Venezuelans with professional careers such as doctors and teachers have been crossing the border to Colombia to exchange sexual services for money in order to survive. According to The Washington Post, Venezuelans are applying for asylum to other countries at explosive rates not seen since the Syrian refugee crisis in 2015.
In a recent episode of Reality Check, Ben Swann explained Venezuela launching its own national cryptocurrency, the petro, and the issues arising from digital currency that is rooted in government rather than fully decentralized.