Venezuelan banks now have no choice but to accept cryptocurrency

The president of Venezuela has ordered the nation’s banks to adopt the Petro cryptcurrency…

The tumultuous financial situation in Venezuela, that’s seen hyperinflation and financial struggles grip its economy, is taking another turn.

The country’s president, Nicolas Maduro, had staked a lot on the introduction of a national, official cryptocurrency, the Petro. So much so that earlier this month, the country’s traditional currency, the bolivar, was effectively devalued and replaced by the sovereign bolivar, instantly taking five numbers off the end of the number on existing banknotes.

The sovereign bolivar and the Petro are linked, and Maduro also introduced big petrol price prices, and an increase in the country’s minimum wage, in a series of drastic measures.

The Petro continues to be a controversial coin, that earned headlines when US President Donald Trump for one refused to have anything to do with it. Furthermore, there are concerns over the claim that the Petro is backed by gold, oil, gas and diamonds, as originally promised at the end of last year.

But against a backdrop of inflation that had been predicted to reach 1,000,000%, and a prolonged economic recession, Venezuela is pressing ahead with its plan to use the coin as it frantically attempts to turn its economy around. To the point now where President Maduro has explicitly ordered the country’s bank to start accepting the Petro, and to formally adopt it.

All banks in the country are thus now required to accept the Petro, and this was announced alongside the offer of bonds to Venezuelan citizens, that in turn would be backed by gold bullion (“no one can say that gold loses its value”, Maduro argued when making said announcement).

Whether these latest measures can turn around the country’s financial crisis remains to be seen.

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