Venezuela’s president Nicolas Maduro has ordered the country’s consular services, as well as several other services and gas stations, to accept any cryptocurrency including the nation’s own petro. In addition, he has announced the launch of another cryptocurrency, this time backed with gold.
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Maduro’s Orders
Maduro has ordered various government services to accept any cryptocurrency including the petro, Venezuela’s oil-backed currency which began its private pre-sale on February 20. This announcement was broadcasted nationwide from the Miraflores Palace and also reported on the website of the Superintendency of Cryptocurrencies. The president said:
I order the payment of consular services in all embassies and consulates of the Bolivarian Republic of Venezuela in the world, [and] all consular services in the country, in the petro currency or in any cryptocurrency.
Maduro also announced that “the National Association of Airlines will be able to pay in petro or in any cryptocurrency [for] the fuel and the services associated to the airlines in the rendering of their services in Venezuela.”
Furthermore, he ordered “a manual be established for the payment of tourist services in the country through the Venezuelan cryptocurrency or any other virtual currency.” According to him, “service providers, hotels, inns, national and international tourist services” asked him for authorization so they can “begin charging in cryptocurrencies and petro.”
Crypto Accepted at Border Gas Stations
At the petro launch event, Maduro also revealed, “we are going to establish new international gasoline services at the border.”
He elaborated that his government “will charge in petro [for] all Venezuelan fuel that is sold in the service stations located at the different points of the border of Venezuela and Colombia.” Citing that several service stations are charging in Colombian pesos and bolivars in international prices, he declared that starting on Wednesday:
In the revitalized gasoline services plan to combat the smuggling of gasoline at the border, we will proceed to charge in all cryptocurrencies, especially the petro.
Major State-Owned Companies to Use Petro
The Superintendency of Cryptocurrencies confirmed on Wednesday that three state-owned companies “will also make sales and purchases with the petro.” They are the oil and natural gas company Petróleos de Venezuela (Pdvsa), its petrochemical subsidiary Pequiven, and the conglomerate Venezuelan Guayana Corporation (Cvg).
Consequently, Maduro explained that “suppliers and creditors of these companies must conduct their commercial transactions of purchase-sale in a percentage of their products and supplies in the petro [starting] from today.”
Furthermore, during a Patria Para Todos (PPT) party event on Wednesday, the Venezuelan president revealed that:
Next week we will launch the petro-gold that will accompany the petro…We already have 36 exchange houses in the world that are working with Venezuela and the petro.
Petro Skeptics
Since the launch of the petro, many skeptics have expressed doubt towards the cryptocurrency. Harry Colvin, director and senior economist at Longview Economics, told CNBC that it is doubtful the petro will be a success, adding that “Venezuela has been known for misappropriation of assets in the past and the central bank has just created hyperinflation so I imagine there’ll be trust and transparency issues.”
Moreover, the Venezuelan National Assembly has already declared the petro illegal ahead of its launch. “If Maduro loses the election in April – or is forced out of power – then petros would probably be made illegitimate,” Colvin noted.
Johns Hopkins professor Steve Hanke, a noted economist and Senior Fellow of the Cato Institute, tweeted on Wednesday:
With Venezuela’s traditional currency failing, why should investors have any faith that the petro will be a stable currency. The petro is just another desperation play by Maduro.
What do you think of Maduro’s plans? Let us know in the comments section below.
Images courtesy of Shutterstock and the Venezuelan government.
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