According to a recent report, Venezuela’s pensioners are no longer getting paid using the national currency— bolivars. It was made known that Venezuelan authorities are now having pensioners’ bolivars replaced with the nationally backed cryptocurrency, the Petro.

Pensioners Getting Paid in Petro

Based on a local news report, pensioners in the country were recently paid in Venezuela’s official currency. However, after getting the alerts that their various bank accounts have been credited, they got another notification stating that their money has been converted to Petro. This was done without any previous notification or some sort of permission.

What this means is that the Venezuelan Government has not taken the option, feelings or concern of its pensioners into considerations before making a decision that strongly affects them.

Petros are Currently not Spendable in Banks

With how tough things are in the country right now, the government has made it even more difficult for its pensioners to access their money. According to the local report, most of these pensioners live solely on these payments. This means they already have way through which they sort the withdrawals and dispensation of the funds for their various needs. With the new Petro units, things have becomes quite difficult for these pensioners, especially those who are not so tech savvy.
According to local news media, Petros is currently not spendable in banks, as a result of this, pensioners are subjected to using other non-conventional means to get their money.

Bad Move

This move by the government of the country has been highly criticized by the several media. Quoting a notable Venezuelan-based financial blog,
“This must be a new form of the dictator’s erotic fantasy and wet dream: full control over citizens’ finances. They could take money when they feel like it, erase it, transfer it, you name it,”

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Venezuela’s government plans to present its national cryptocurrency, the Petro, as a unit of account for international crude oil trade to the Organization of Petroleum Exporting Countries (OPEC). The move is a further attempt by the country’s government to strengthen the position of its controversial state-issued cryptocurrency.


Petro as a Unit of Account for International Crude Oil Trade

According to local media sources in the Latin American nation, Venezuela wants to utilize the Petro as a unit of account for the commercialization of its crude oil. The head of Petroleos de Venezuela, the state-owned oil company, Manuel Quevedo, says from 2019, all Venezuelan crude oil will be traded for the Petro.

For Quevedo, the move is a continuation of the government’s drive to legitimize the controversial cryptocurrency. Quevedo, who also doubles as the nation’s Minister of Oil and Mining, said that the cryptocurrency formed an integral part of Venezuela’s economic recovery and growth.

This move isn’t the first time that Venezuela will be pushing a cryptocurrency agenda to OPEC. In February 2018, President Nicolas Maduro urged the cartel to adopt a common oil-backed cryptocurrency. The country also tried to woo India with a 30 percent discount for crude oil imports, but India declined the offer.

Circumventing US-led Economic Sanctions

There are more than apparent incentives for the country to push for such an agenda with OPEC. Using the Petro as a unit of account for international oil trade provides a needed boost for the much-maligned cryptocurrency. It also provides an avenue for the government to achieve one of its stated aims for the Petro – circumventing US economic sanctions.

Meanwhile, the country continues to grapple with a collapsing economy, hyperinflation, and an otherwise worthless fiat currency. To survive, citizens have since turned to Bitcoin and other cryptocurrencies like Dash. The country continues to break new records for BTC trading volumes of p2p trading platform Localbitcoins.

Against the backdrop of such bleak economic conditions, the government continues to advance the Petro agenda, albeit against vocal opposition from critics both within and outside Venezuela. Keen to get the cryptocurrency in everyday use, the government mandated banks to accept the Petro. Recently, the cryptocurrency also became the accepted means of payment for international travel passports.

Do you think Venezuela’s plan to use its state-owned cryptocurrency as a unit of account for international oil trade has any merits? Let us know your thoughts in the comment section below.

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Over the weekend, Venezuelan President Nicolas Maduro began broad economic changes that ultimately ties Venezuela’s currency to the contentious ‘oil-backed’ cryptocurrency Petro.

As CCN reported, President Maduro announced the plan last week and has followed through. As part of the fiscal changes, The Central Bank of Venezuela devalued the nation’s currency by 95% (about five zeroes) due to the ongoing hyperinflation of the Bolivar. The new value and currency is now renamed to the “sovereign bolivar,” which is pegged to the oil-backed Petro cryptocurrency that Maduro launched earlier this year as an ERC-20 token.

A History-Making Event, but under Poor Conditions

Venezuela’s switch to a cryptocurrency-pegged currency marks the first time that a nation has done so. However, economists warn that the subsequent devaluation will only worsen the inflation rated, which is growing at an annualized rate of a whopping 108,000 percent, according to Bloomberg.

As CCN reported, Venezuelans were already liquidating their bolivars into Bitcoin earlier this year, in spite of a government ban. The population has also been fleeing Venezuela to avoid the momentary crisis, which now borders on a humanitarian crisis. Though the conditions are not rosy for the history-making event for the cryptocurrency, President Maduro ultimately followed through with sweeping monetary changes, while the world watches the eventual outcome.

The switch to the Petro is far from a solution to the Venezuelan economic crisis. The country still teeters on economic collapse. President Maduro also faces losing power over the country or an outright ousting. An assasination attempt with a drone occurred earlier in August while Maduro gave a speech.

The dramatic changes reflect the “government’s willingness to do what it takes to stay in power,” Raul Gallegos, an associate director at Control Risks, told Bloomberg from Bogota. “Maduro looks vulnerable, clearly something could happen.”

Banks and ATMs have been closed while they scramble to accommodate the new currency rules.

Featured image from Shutterstock.

This post is credited to CCN