Maduro Forces Banks to Use Petro - Bitsonline

Maduro Forces Banks to Use Petro

Desperate to curb Venezuela’s hyperinflation, Leftist president Nicolas Maduro is forcing public and private banks to use the government-issued, oil-backed cryptocurrency, el Petro, as a unit of account. Recently, the government introduced the Petro-backed currency — the Sovereign Bolivar, a replacement for the country’s inflation-plagued national currency, the Bolivar.

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Petro Shifts to the Banking Sector

A resolution by Sudeban, Venezuela’s banking sector regulator, forces banks to use the state-issued cryptocurrency in all financial reports, as reported by Agence France-Presse. The beleaguered recently re-elected Maduro administration has ordered all financial institutions to adopt the Petro as a unit of account from August 27th. Many have labeled the cryptocurrency a scam, including American magazine Wired and in a report in Forbes.

Previously, the Petro was to be used as a mode of payment for oil dealings, but now Maduro wants to bring it to the country’s banking system. Recently, the Venezuelan president declared a single exchange rate for the country’s oil-backed cryptocurrency.

At the time, Maduro increased the minimum wage by over 3,000 percent and also raised the corporate tax rate. “I want the country to recover and I have the formula. Trust me,” claimed the leftist president.


Maduro to Introduce Gold-Backed Bonds

In July this year, the International Monetary Fund predicted that the South American nation’s inflation rate would hit one million percent. As part of a package of monetary reforms, the Maduro administration is issuing a new currency dubbed the Sovereign Bolivar pegged to the Petro to overcome the hyperinflation pushing the country close to the verge of the most severe economic crisis imaginable.

As previously revealed, the new currency is formed by devaluing the previous version of the Bolivar by 95 percent, axing five zeros. Earlier this year, Maduro tweeted, “We are going to dismantle the perverse war of neoliberal capitalism to install a virtuous, balanced, sustainable, healthy, and productive economic system”.

Additionally, the Venezuelan government also plans to launch bonds secured by gold bullion on September 11th:

“No one can say that gold loses its value.”

The Maduro administration is desperate to circumvent the economic sanctions imposed on it by the United States. However, with the government doing too much and making things complex, Venezuelans are shifting their interest towards open source cryptocurrencies such as Dash.

A recent report by the BBC labeled Venezuela a paralyzed country where cash withdrawals are restricted and its citizens perplexed by the new mechanism of dealing in money. A report by Business Insider indicated that the number of merchants enlisting to accept Dash has accelerated in recent times.

Will the Petro be able to save Venezuela from its severe economic crisis? Share your views in the comments section below.

Images via Pixabay

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