Venezuelan President Nicolás Maduro has ordered banks in his country to accept the Petro digital currency as a unit of account. The move is in a bid to combat the ill-effects of his presidency’s economic policy. Furthermore, Maduro has also imposed an increase in the country’s minimum wage, the petrol price, and VAT as part of his latest suite of economic reforms.
In a report by Channel News Asia on Tuesday, Venezuela’s Sudeban banking regulator issued resolution that directs all banks in the country to adopt the Petro cryptocurrency. The move, which was made public on Monday, aims to ease the economic crisis that has ravaged the country for many years now.
As millions have fled the country to escape the crisis, Venezuela’s plight only appears to worsen. Previously, the International Monetary Fund (IMF) has estimated that the inflation in the country can reach up to one million percent before the end of 2018. Meanwhile, remaining citizens have resorted to using cryptocurrencies like Bitcoin and Dash.
The central government-initiated economic reforms include a 3,400 percent hike in the required minimum wage, an increase in the VAT rate from the previous 12 to 16 percent, and an oil price hike.
Aside from these said measures, the country’s president plans to offer gold-backed bonds. Maduro hopes that these attempts will promote responsible saving strategies among Venezuelans. The project, which will begin in mid-September, gives citizens the opportunity to purchase “longoticos” or little ingots. In a televised speech, Maduro states:
“No one can say that gold loses its value.”
In May, Maduro has been re-elected for six more years in a controversy-tarnished election. Maduro hopes to create some level of financial stability by creating the Petro, which was released in February.
The Venezuelan president has recently declared the Petro as the nation’s second national currency. The national crypto is reportedly backed by the country’s oil reserve. There are also rumors that the initiative is a Russian-led experiment meant to circumvent U.S. economic sanctions.
Meanwhile, Venezuelan citizens are also exploring other alternative financing options. Dash is becoming more popular among Venezuelan merchants and consumers. In line with this, the Dash Foundation has poured in a total of $1 million in investment in the country to educate the people about cryptocurrencies.