The Sandinista government today is celebrating its first commercial transaction using the “SUCRE,” an invented virtual currency that has been adopted as a legal tender for trade between the various member nations of the Bolivarian Alliance for Our Americas (ALBA).
Today at noon, in a televised transaction, the Sandinista government sold 500 metric tons of black beans to Venezuela for 517,875 SUCRES. Nicaragua also sold Venezuela 500 tons of sugar and 500 tons of soybeans for an additional $1,632,009 SUCRE, a Spanish acronym for Sistema Unitario de Compensación Regional de Pagos.
In real Nicaraguan currency, the total sale was worth more than 65 million cordobas (or $2.6 million). But for the Sandinista government, the bean deal was more of a political victory than a commercial one. Or, as the case may be, more virtual than real. (For giggles, try paying your Nicaraguan taxes in virtual SUCRE this month, just to see what the DGI says).
The SUCRE, gushed first lady Rosario Murillo, is “a mechanism of brotherhood from our people to develop ourselves with justice, with independence, with complementarity, with solidarity, with unity, building, securing, affirming the Great Fatherland.”
In other words, it ain’t business as usual.
The SUCRE was devised in 2009 as a way for ALBA countries to do business with one another without using the U.S. dollar, the unofficial international currency of Latin America. Since first being implemented in 2010, the SUCRE had already been used for more than 2,600 transactions between Venezuela, Ecuador, Bolivia and Cuba—all prior to Nicaragua’s buy-in today.
“The signatory countries invited the rest of the countries of Latin America and the Caribbean to join the (SUCRE financial) system to achieve a harmonious and integrated development and sovereignty for our region according to our own needs and in benefit of our people,” Nicaraguan Central Bank President Alberto Guevara told the Sandinista press at today’s bean sale, which was closed to independent media.
So far, no non-ALBA countries have accepted the invitation to start doing business in the virtual currency, which has the same street value as casino tokens, only less tangible.
Some have compared the SUCRE to the erstwhile Central American Peso, which was used during the regional common market days of the 1960s. Today, the Central America Peso has the same value as Confederate currency.
Former Central Bank President Mario Arana says there are some real benefits to using the SUCRE for trade, such as reducing transaction costs by avoiding exchange rates with multiple currencies. By agreeing to use a fanciful currency, the countries of ALBA can “simplify transactions between one another because there is no need to buy or sell dollars,” Arana tells The Nicaragua Dispatch.
Arana says the SUCRE will function as a clearing house, whereby the Central Bank of each participating nation will have to honor the debts and pay vendors in a real exchangeable tender.
Defenders of the SUCRE say the common currency will faciliate commerce, thereby resulting in more trade.
Still, if the SUCRE ends up being exchanged for local currency at a rate that is pegged to the U.S. dollar, its use in international trade may end up being more symbolic than revolutionary.
“If it makes them feel more nationalistic to use the SUCRE, then fine. But it has no real consequence,” says political analyst Arturo Cruz.