Venezuela re­leases cryp­tocur­rency Petro to save Coun­try from Eco­nomic Melt­down

The Star (St. Lucia) - - LOCAL -

VENEZUELA has launched a state-run, oil-backed cryp­tocur­rency in a bid to end a crip­pling fi­nan­cial cri­sis that has seen the coun­try tee­ter­ing on the brink of hy­per­in­fla­tion.

In July, five ze­ros were slashed from the value of the Venezue­lan Bo­li­var in a bid to bring it back un­der con­trol, prompt­ing sug­ges­tions of the use of cryp­tocur­rency to ease the na­tion’s fi­nan­cial woes.

And in Au­gust, the In­ter­na­tional Mon­e­tary Fund (IMF) pre­dicted the in­fla­tion rate in the coun­try would reach one mil­lion per cent, al­though ex­perts be­lieved the fig­ure was ex­ag­ger­ated.

Two mil­lion cit­i­zens have fled Venezuela to seek eco­nomic refuge else­where.

Ac­cord­ing to a state­ment posted on the Venezue­lan gov­ern­ment’s of­fi­cial site, Pres­i­dent Nico­las Maduro ap­peared on na­tional tele­vi­sion and an­nounced the of­fi­cial launch of the Petro cryp­tocur­rency.

Petro’s brand new white pa­per states that the cur­rency is backed 50 per cent by oil, 20 per cent by gold, 20 per cent by iron, and 10 per cent by di­a­mond as­sets.

Maduro stated that the of­fi­cial web­site for the Petro has al­ready been launched, and the of­fi­cial Petro wal­let is also avail­able in Google Play.

The Pres­i­dent also stressed Petro will be avail­able on six ma­jor cryp­tocur­rency ex­changes from Mon­day, Oc­to­ber 1.

Mr Maduro did not spec­ify which ex­changes will even­tu­ally trade oil-backed cur­rency, nor was it listed by largest traders such as Bi­nance, OKEx and Huobi.

How­ever, the pub­lic sale of the cryp­tocur­rency will be­gin on Novem­ber 5.

He also stated all oil pur­chases in and out of Venezuela must be paid with the fledg­ling cur­rency.

The rule also ap­plies to in­ter­na­tional air­lines whose routes lie through lo­cal air­ports as fuel for air­crafts will also be sold us­ing Petro.

Maduro an­nounced Petro would be used as the unit of ac­count for lo­cal salaries, goods, and ser­vices as the na­tional sov­er­eign Bo­li­var kept strug­gling with hy­per­in­fla­tion.

But de­spite Maduro’s state­ments. ex­perts re­main scep­ti­cal on the use of Petro.

In Au­gust, Reuters claimed there was no sign of Petro ex­is­tence in Venezuela.

Amer­i­can tech­nol­ogy and cul­ture mag­a­zine Wired called the Venezue­lan coin “a stunt” that aimed to cover up the gov­ern­ment’s fail­ure to re­cover the na­tional cur­rency

Moises Ren­don, of the Wash­ing­ton-based Cen­ter for Strate­gic and In­ter­na­tional Stud­ies told AFP: “It’s too late to save the Petro. There’s no con­fi­dence and it won’t get any.”

As a con­se­quence of the eco­nomic in­sta­bil­ity in the coun­try, more than two mil­lion Venezue­lans are pre­dicted to have fled the coun­try in search of eco­nomic pros­per­ity and work.

The mi­grants have mostly fled to neigh­bour­ing South Amer­i­can na­tions such as Colom­bia, Ecuador, Peru and Brazil.

But Mr Maduro has per­sis­tently mocked those flee­ing the coun­try’s eco­nomic cri­sis, brand­ing them as “slaves and beg­gars”.

As of Septem­ber, in­fla­tion in the coun­try was tipped at around 200,000 per cent — with ba­sic food and medicine dif­fi­cult for the pub­lic to ob­tain.

US Vice Pres­i­dent Mike Pence de­liv­ered a stark warn­ing to Venezuela last week, af­ter the South Amer­i­can na­tion de­ployed troops to the Colom­bian bor­der in what is seen by Wash­ing­ton as a highly in­cen­di­ary move.

The US hit back by im­pos­ing sanc­tions on four key mem­bers of Venezuela’s goven­r­ment: first lady Cilia Flores, Vice Pres­i­dent Delcy Ro­driguez, Com­mu­ni­ca­tions Min­is­ter Jorge Ro­driguez and De­fence Min­is­ter Vladimir Padrino.

US Trea­sury Sec­re­tary Steven T. Mnuchin said in a state­ment, “Trea­sury will con­tinue to im­pose a fi­nan­cial toll on those re­spon­si­ble for Venezuela’s tragic de­cline, and the net­works and front-men they use to mask their il­licit wealth.”

Maduro re­sponded Tues­day night by say­ing: “If you want to at­tack me, at­tack me, but do not mess with Cilia, do not mess with the fam­ily, do not be cow­ards.”

Mr Maduro ac­cused em­bassy staff from Colom­bia, Chile and Mex­ico of a failed as­sas­si­na­tion at­tempt on his life early last month.

--- Ex­press

Mr Maduro has of­fi­cially launched the Petro cr­py­tocur­rency to tackle Venezuela’s eco­nomic cri­sis.

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