Venezuela to use petro as accounting unit

Posted: 15 August 2018 1:30 pm

The first-ever national cryptocurrency, along with the Bolívar Soberano, will become an economic measure.

Venezuela will begin using its controversial, US-banned petro cryptocurrency as an authoritative accounting unit from the beginning of next week, according to the country’s President Nicolás Maduro.

ABC International reports that during a recent televised interview Maduro revealed Venezuela and its state-run oil and gas company Petróleos de Venezuela (PDVSA) will use the digital currency and the South American nation’s new petro-backed sovereign bolivar currency as mandatory accounting units from Monday August 20.

The Bolívar Soberano (Sovereign Bolivar) will replace the Bolívar in Venezuela, distributed on the same date.

The Bolívar Soberano will have five less zeros than its predecessor, which may make it easier for residents and visitors to count, carry and transact. However, all factors considered, it won’t change anything economically. The fact that the Soberano will be backed by the Petro doesn’t do much to encourage stability. Despite this, President Maduro is confident that the new currency will “stabilize and change” Venezuela’s monetary system.

New banknotes will reportedly be circulated within a week, with denominations adjusted for hyperinflation, which the International Monetary Fund (IMF) estimates will end this year at approximately 1,000,000%.

“The Central Bank of Venezuela (BCV) will begin to publish the official figures of the value of the sovereign bolivar according to the petro and the value of the petro according to international currencies,” Maduro said.

“There will be a new salary system and a new pricing system for goods and services anchored to petro.”

Maduro claims the petro raised $735 million on its first day and that the ICO ended up exceeding US$5 billion.

The Venezuelan National Assembly (AN) described the state-issued cryptocurrency as an “unconstitutional” violation of the Magna Carta and the laws of the nation. The AN rejected the newly imposed financial mechanism and all the obligations emanating from its circulation, issuing an alert for potential investors.

In March, United States president Donald Trump signed an executive order which prohibits Americans from buying, selling, trading and transacting in any way with Venezuela’s newly released cryptocurrency, the petro.

Earlier this year, Maduro promised to introduce a second token, petro gold, backed by mineral reserves.

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