Venezuela’s Petro Cryptocurrency To Be Used As Unit Of Account For Salaries, Goods And Services

Announcements, News | August 15, 2018 By:

Venezuela’s President Nicolas Maduro has announced that the country’s oil-backed cryptocurrency, the Petro, will be used as an official unit of account.

In a televised announcement, Maduro said that oil and gas company Petróleos de Venezuela (PDVSA) will begin using the oil-backed cryptocurrency as a mandatory unit of account.

“As of next Monday, Venezuela will have a second accounting unit based on the price, the value of the Petro,” Maduro said. “It will be a second accounting unit of the Republic and will begin operations as a mandatory accounting unit of our PDVSA oil industry.”

The Venezuelan government will also introduce a new salary system and a pricing system for goods and services that are anchored to the oil-backed cryptocurrency.

“This means a substantial improvement and a better stability of incomes of workers, while setting a maximum price of sale for the public, which ought to be respected,” Maduro said. “Basing Venezuelan salaries on the Petro will stabilize people’s buying power, also, there will be stability in product sales. Speculation has ended, which helps all Venezuelans without distinction. All the institutions linked with the systems of distribution and price will guarantee its effectiveness as the prices will be rooted in the Petro, there won’t be any excuse for speculation.”

Starting August 20, Maduro said Venezuela will have two currencies, the Petro and the Bolívar Soberano (Sovereign Bolivar). In attempts to combat rampant inflation, Sovereign Bolivar, which will be tied to the Petro, will take five zeros away from the current national currency, the Bolivar Fuerte. Citizens will be able to claim one Sovereign Bolivar for every 100,000 Bolivar Fuerte they own.

“By 2020, the nation will be able to recover economic and social stability and prosperity,” Maduro said. “We are building a new revolutionary and humanist economic thought, with a new strategic economy for a new economic model. On August 20, a new era will begin.” In real time, Venezuelans will know the price of the Sovereign Bolivar and the Petro, made public by the Central Bank. Also, detailed explanations of the salary system and the prices based on the Petro will be forthcoming on August 20. Speculation has ended!”

The Petro was first announced at the beginning of December 2017 to help combat the US’ “blockade” against Venezuela. At the time, Maduro said it will enable the country to advance in monetary sovereignty and carry out its transactions to overcome the financial blockade, as well as overcome catastrophic hyperinflation which is projected to hit 1,000,000 percent this year. Since the launch of its pre-sale in February of this year, Maduro has claimed that it raised about $850 million, though no evidence has been presented to back up the claim.

Critics within Venezuela as well as those in the US and abroad have been quick to condemn the Petro as yet another instance of economic mismanagement, even fraud, on the part of the Maduro regime. In March, US President Donald Trump signed an executive order banning any US transactions in the Petro as part of a series of new sanctions against the country.