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Maduro order government services to accept any cryptocurrency

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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.

 

At the petro launch event, Maduro also revealed, “we are going to establish new international gasoline services at the border.”

Maduro has forced the state-owned company Petróleos de Venezuela (PDVSA), Repsol’s partner in the country, to pay part of its purchases of products in “convertible petroleum currency”, a currency that started last Monday with strong criticism from the opposition, since the new currency is against the Constitution.

The Petro is backed by 5,324 million barrels in reserves of the Orinoco Oil Belt, the largest in the country and the world. But also for gold, diamonds and coltan, – a mineral linked to the Congo war and used in mobile devices. The value of the petroleum is equivalent to the price of a barrel of Venezuelan crude and each unit of Petro will be backed by a purchase-sale contract for a barrel of oil.

The primary issue is carried out through auctions and direct allocations. In case the barrel remains at 60 dollars and the entire placement is sold, a total of 100 million petros will circulate, which will bring 6,000 million dollars to the state coffers. The amount will alleviate the liquidity tension, but it will not solve the serious problems that the Venezuelan economy is experiencing. Repsol’s partner in Venezuela has drastically reduced its production, falling from 3.9 million barrels per day to 1.6 million barrels in two decades, which is why the government has lost currency revenues.

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