The president of Venezuela, Nicolás Maduro, has revealed that a new crypto-backed currency will start circulating in the country by August 20, according to a recent report by local news outlet Telesur.
Petro (PTR) is an oil-backed national cryptocurrency which was initiated by the Venezuelan government in February, and since then, it has been used for several projects nationwide. The new national currency, the Bolívar Soberano (Sovereign Bolivar), will reportedly have five zeros less than Bolivar Fuerte (VEF), the current currency accepted in the country. Bolívar Soberano will be anchored by petro, the national digital currency. President Maduro stated that:
“The economic reconversion will start on August 20 definitively with the circulation and issuance of the new Sovereign Bolivar, the new monetary cone that is going to have a new method of anchoring the Petro.”
The president noted that the measure aims to support the nation’s monetary and financial system “in a radical manner,” adding that the anchoring and reconversion to Petro is a “great hope” for enhancing a “productive, diversified and sustainable economic model.”
While speaking about the country’s cryptocurrency, the president expressed his optimism stating that he expects the Petro to end up being “consolidated technologically and financially” to “permeate all the national and international economic activity.” President Maduro further explained that:
“I ask for your confidence, I ask for your support, beyond ideologies and political positions, because Venezuela needs this change, the mafias are over!,” “We have the correct vision of what the economic future in Venezuela should be, above all, we will achieve it.”
However, the idea of reconversion has come under scrutiny by several financial experts. Maxim Ross, a renowned economist, reportedly claimed that the measure “does not solve anything” in March 2018.
Also, another economist, Angel Alvarado, made critical comments on the move made by the Venezuelan government, Alvarado, who is also an opposition legislator told CNBC that: “taking zeroes off the money doesn’t fix a thing,” and it doesn’t appear as a way of combating inflation in the economy.
Petro; The Way Out of Inflation?
In a country with high inflation rate due to the rapid decline in the value of the Venezuelan Bolivar, citizens of the country have been pushed to start buying virtual currencies to store to store their wealth. This forced the government to introduce its backed cryptocurrency, Petro (PTR), as a way of adopting the innovation. The president said:
“The oil-dependent model has come to an end, and it will not return, Venezuela needs to continue making great efforts to build a new economic model, diversified, productive, relevant, advanced.”
Petro has been used for funding various government projects since its launching. Recently, the government of Venezuela announced its intention to use Petro for financing the construction of houses for the homeless in the country, news that was positively received by the citizens of the nation.