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Venezuela ramps up use of controversial cryptocurrency

By Francis Jay

Maduro plans to fund science through crypto scheme

Venezuela ramps up use of controversial cryptocurrency

Venezuelan President Nicolas Maduro has announced that he is stepping up his promotion of the state-issued cryptocurrency, Petro.

In a state broadcast, he announced that protectorates and states would be paid one million Petros bimonthly, from November 2019 onwards. He also announced plans to fund the scientific community via the Petro.

The move comes as the President searches for ways to kick-start Venezuela’s economy and stem the number of people leaving the country. The Petro was launched in February 2018 and was said to be backed by Venezuela’s natural resources, including its oil and mineral reserves. Last year the government said it would employ the Petro for oil sales.

When it was launched, the Petro was promoted by the government as “an instrument to consolidate Venezuela’s economic stability and financial independence, coupled with an ambitious and global vision for the creation of a freer, more balanced and fairer international financial system”

A white paper published last October laid out the potential benefits, saying: “The State of Venezuela will promote and encourage the use of the Petro, to make it a fundamental investment option, savings mechanism and means of exchange with State services, industry, commerce, trading, common people and the whole world.”

However, the currency has been widely criticised by crypto commentators, economists and analysts, who stated that it was not being used. Economist Steve Hanke called it “a sham”.

Subsequently, President Maduro said that the Banco de Venezuela had to allow citizens to buy and trade El Petro. Now, according to a report in the Miami Times, the government is urging Venezuelans working in other countries to begin sending money home using the Petro.

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