All transactions involving government institutions in Venezuela must now accept Petro — the first ever state-issued cryptocurrency — as legal tender, according to an official proclamation in the country’s Official Gazette on April 9. From that date, every such institution has 120 days to comply.
All Petro Everything
Venezuelan President Nicolás Maduro has ordered all institutions under the government’s umbrella to accept Petro as legal tender.
As reported by Bloomberg, the government of Venezuela has created a National Cryptocurrency Treasury which will be the sole regulator of all digital assets in the oil-rich country. Abrahan Landaeta has been appointed to lead the Cryptocurrency Treasury, while Anthoni Camilo Torres has likewise been appointed as the head of virtual exchanges.
The decree isn’t particularly surprising, given Venezuelan President Nicolás Maduro’s ultra-bullish stance on his government’s pet project, which he claims has already raked in $5 billion from Chinese, Russian and Mexican investors. However, these numbers come directly from Maduro’s administration, and many are skeptical as to their accuracy.
Venezuela is currently in the throes of severe economic issues, including hyperinflation. As noted by Bloomberg, “The International Monetary Fund forecasts inflation will hit 13,000 percent by year-end, while the economy is set to contract 15 percent.” Meanwhile, extreme food shortages have led to malnourishment and hunger, while unemployment continues to skyrocket. No matter how bullish one might be on cryptocurrency, it’s difficult to see how Petro could effectively solve these problems.
From an objective viewpoint, it’s also difficult to understand why any foreign investor would purchase Petro tokens, other than as a means of circumventing U.S.-imposed economic sanctions against Maduro’s government.
Petro is supposedly backed by the oil-rich country’s natural resource, but some experts claim that oil has yet to be drilled — and the government itself isn’t even in complete control of the nation’s oil-drilling operations. Furthermore, the token’s only use case has thus far been to pay Venezuelan taxes, though it appears that it will soon be used to pay for anything and everything government related.
Cryptocurrency research sites that actually took the time to examine the state-issued cryptocurrency have unanimously labeled it a scam.
What do you think about Petro’s increased importance in Venezuela’s plan to save itself from complete and utter economic collapse? Let us know in the comments below!
Images courtesy of Wikipedia Commons, Bitcoinist archives, Bloomberg.