Venezuelan President Nicolas Maduro has ordered banks to adopt the Petro crypto as their legal tender and account currency as of Monday, in an attempt to overcome Venezuela’s monetary crisis.
From now on, all financial information will have to be provided in two currencies: Bolivar and Petro, according to the instructions of the banking supervisory body Sudeban.
Last week, the Caracas government issued the Sovereign Bolivar linked to the Petro crypto and removed 5 zeros from the currencies in circulation.
According to the International Monetary Fund, inflation in Venezuela was 100 thousand% in 2017 and was set to reach 1 million% in 2018.
Since the beginning of the crisis, more than 2 million people have left the country, leading to a humanitarian crisis that has hit the whole of South America with serious political repercussions.
The plan, in addition to the exchange rate of the currency, would provide for an increase in the minimum wage of 3400%, which in any case would not be sufficient to offset the loss of value linked to inflation.
Furthermore, there’s talk about tax increases on gasoline which, for a long time, has had the cheapest price in the world, triggering strong smuggling flows to neighbouring countries.
The Petro should, if implemented correctly, stop the inflationary thrust because it is linked to the price of Venezuelan oil per barrel, currently equal to about $60.
In conjunction with the launch of the Sovereign Bolivar, Maduro announced the launch of gold-backed titles called Lingoticos, which should enable the inhabitants to recover savings swept away by inflation.
These securities, with the central bank symbol, should be backed by 1.5 and 2.5 grams of gold.