Venezuelan President Maduro Orders Banks to Adopt Crypto ‘Petro’

Venezuela's President Nicolas Maduro (C) delivers a speach next to Vice-President Tarek El Aissami (L) next to Venezuela's Minister of Science, Technology and University Education Hugbel Roa (R) during a press conference to launch to the market a new oil-backed cryptocurrency called "Petro", at the Miraflores Presidential Palace in Caracas, on February 20. Venezuela formally launched its new oil-backed cryptocurrency on Tuesday in an unconventional bid to haul itself out of a deepening economic crisis. The leftist Caracas government put 38.4 million units of the world's first state-backed digital currency, the Petro, on private pre-sale from the early hours. A total of 100 million Petros will go on sale, with an initial value set at $60, based on the price of a barrel of Venezuelan crude in mid-January. Venezuela formally launched its new oil-backed cryptocurrency on Tuesday in an unconventional bid to haul itself out of a deepening economic crisis. The leftist Caracas government put 38.4 million units of the world's first state-backed digital currency, the Petro, on private pre-sale from the early hours. A total of 100 million Petros will go on sale, with an initial value set at $60, based on the price of a barrel of Venezuelan crude in mid-January. / AFP PHOTO / FEDERICO PARRA (Photo credit should read FEDERICO PARRA/AFP/Getty Images)

Nicolas Maduro, president of Venezuela, has assumedly mandated banks in the economically troubled South American country to integrate the petro , an oil-backed state cryptocurrencyas per the Agence France-Presse.

Venezuela’s banking sector regulator, Sudeban, Per a resolution passed by Venezuela’s banking sector regulator, passed a resolution that will require financial institutions guarantee that their financial data is calculated in the new petro cryptocurrency besides the country’s fiat currency, the bolivar,

With grocery stores empty and inflation already passed extreme heights, Maduro’s is hoping that instituting the new petro cryptocurrency as a unit of account in order to stifle the economic downward spiral. With the crisis plaguing the South American country over the last half decade, the International Monetary Fund has forecasted that Venezuela hit a million percent inflation rate by the end of the year.

With the economic recession decimating the country, many have sought refugee outside of the borders, currently 2 million people have fled.

The socialist country have been looking for ways to bypass the sanctions imposed on it by the USA, they have also been looking for ways to bring in foreign money, and Venezuela is looking to the petro, which was launched earlier this year, as a solution.

Another project was initiated where a re-denomination exercise was undertaken with the country’s rebranded fiat currency being pegged to the national cryptocurrency, with intrinsic value backed by Venezuela’s oil and mineral resources. The re-denomination resulted in the fiat currency devalued by 95% and renamed the Bolivar Soberano (Sovereign Bolivar).

Banco Central de Venezuela, the central bank of the country, released an Android app designed to help citizens to change the outgoing fiat currency to the new Bolivar Soberano pegged to the petro. Banco Central de Venezuela claimed the app will assist the citizens in converting and adopting the monetary re-denomination process.

In a recent announcement, Maduro revealed that the Petro is going to be the official currency of the state-owned oil and gas corporation, Petróleos de Venezuela, S.A. (PDVSA). Maduro announced on television:
“As of next Monday, Venezuela will have a second accounting unit based on the price, the value of the petro…It will be a second accounting unit of the Republic and will start operating as a mandatory accounting unit of our PDVSA oil industry.”