By
Sanaa Sharma
March 4th, 2022
Venezuelan President Nicolas Maduro ordered banks to adopt the Petro, the Maduro government-launched cryptocurrency, as a unit of account and use this cryptocurrency in all financial reports.
Venezuela’s President Nicolás Maduro has ordered Venezuela’s banks to accept the petro digital currency as a unit of account. Public and private banks must now reflect all financial information in bolivars and petros. Such a decision has been taken in order to alleviate the economic crisis that has plagued the country for several years now.
The news came after the Petro cryptocurrency had received an official status of the Venezuelan second official currency two weeks ago. The President of Venezuela Nicolás Maduro believes that Petro is a tool for overcoming economic difficulties, that’s why Venezuela has a new accounting system in which there are two officially recognized units of account. The first one is the state-issued Petro, while the second is a new petro-pegged denominated Bolivar, which loses five zeros if compared with the existing national currency.
In their intention to expand the role of Petro in the country, Venezuela’s central bank launched an Android app with the aim to help the country’s residents easily convert the country’s old fiat currency bolivar into the newly developed Petro-pegged Bolivar Soberano. As Coinspeaker reported, the app called “Calculadora Soberana” quickly converts Bolivar to Bolivar Soberano by taking five zeroes away from the amount being converted.
The latest announcement is the further step towards steering out of five years of recession and inflation in Venezuela. As the International Monetary Fund (IMF) estimates, the rate of inflation in the country will reach one million per cent later this year. Because of the crisis, more than two million people have fled the country.
Adopting the Petro, which is now tied to and completely interchangeable with the new “sovereign Bolivar,” is not the only reform made by the Venezuela’s leader. Maduro also increased public’s minimum wage by 3,400%, VAT from 12 to 16%, and price of petrol which for years has been the cheapest in the world.
In addition to these measures, Maduro is launching an offer of gold-backed bonds to promote responsible saving strategies for the people of Venezuela, which will allow the nation’s citizens to buy “lingoticos” (little ingots). Maduro said:
“No one can say that gold loses its value.”
The emission, backed in pieces of 1.5 and 2.5 grams (0.05 and 0.09 ounces) of gold, will begin on September 11.
