Venezuelan President Nicolas Maduro recently revealed that the nation’s oil-backed cryptocurrency, the petro, will be used as a unit of account by the state oil company PDVSA. The government is also developing a new salary system that will allow employees to receive their wages in petro funds over fiat.
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“As of next Monday, Venezuela will have a second accounting unit based on the price and value of the petro. It will be a second accounting unit of the republic and will begin operations as a mandatory accounting unit of our PDVSA oil industry,” Maduro announced.
The petro was introduced[2] through a pre-sale back in February of 2018 as a means to attract foreign capital to boost the Venezuelan economy and circumvent both EU and U.S. sanctions. It was designed to shore up an economy in shambles, as the bolivar has been struck with rampant hyperinflation over the past year.
From the very beginning, the currency aroused controversy both in and out of Venezuela. Many in the National Assembly publicly claimed that the currency was potentially illegal and that its white paper[3] lacked sufficient details or offered unscrupulous arguments for its creation. Concerns further arose in the U.S., which led to President Trump’s subsequent[4] petro-trading ban in March of 2018.
Some arguments in favor of the cryptocurrency state that the petro makes paying taxes and settlements with state bodies less expensive and that the currency can be easily — and quickly — converted into USD.
Regardless, cryptocurrency is often viewed[5] as an economically liberating tool in the everyday Venezuelan’s struggle to survive. Bitcoin Magazine recently chronicled the struggles of a Venezuelan resident under the alias Hector, who received a donation of
