president Nicolás Maduro announced the launch of a Petro-funded crypto bank to support initiatives from youth and students, Latin American government-sponsored news outlet TeleSur reported yesterday, May 3.
During а speech for the Chamba Juvenil Plan, a social program that promotes jobs for youth, Maduro also noted the necessity of universities maintaining their own crypto mining farms to support the national economy.
According to the The digital crypto bank will be funded with 20 mln Petros – Venezuela’s government-issued cryptocurrency – which Maduro said is equal to close to $1.2 bln. The Petro pre-sale, which was held from Feb. 20 to March 19 and reportedly raised $3.8 bln from 127 participating countries. The initiative has brought up questions internationally over the national cryptocurrency’s role in the global economy, particularly in regards to the Western economic sanctions currently in place against Venezuela.
As Venezuela’s economy is currently experiencing hyperinflation, the use of decentralized cryptocurrencies like Bitcoin (BTC) has become more attractive to citizens that may see crypto as a less risky investment than the Venezuelan bolivar.
Venezuela Plans a Tax Reform to Boost Petro use and Thwart Actual Cryptocurrencies
Venezuela’s native Petro cryptocurrency has not been too successful so far. A new tax reform may help shake things up, yet it isn’t good news for actual cryptocurrencies.
The Petro has not lived up to the expectations from day one.
Another Futile Attempt to Promote the Petro
A cryptocurrency pegged to domestic oil reserves can work on paper, but not in a poverty-stricken region.
To increase demand and usage for this native currency, a new tax reform looms on the horizon.
That change will see cryptocurrencies such as Bitcoin, Dash, and Ethereum being affected the most.
Currently, there is a 16% VAT in effect for all monetary transactions in the country.
This tax reform would allow the Venezuelan government to charge extra VAT for decentralized cryptocurrencies such as Bitcoin.
How high this new rate will be, has not been confirmed at this time.
Rumors make a mention of an extra 5% to 25% per transaction.
While this move may drive people away from decentralized cryptocurrencies, it won’t cause an increase in Petro usage by definition.
Currently, it is still impossible to obtain this currency as a foreigner.
Even locals struggle to get their hands on the Petro, further confirming this project doesn’t seem viable.
It will be interesting to see how this new venture will pan out over the coming months.
Venezuela Petro Dumped at a 50% Discount at LocalBitcoins
Venezuelans are dumping the government-issued Petro, a crypto coin backed by a barrel of Oil, for half its value ($30) at peer-to-peer exchanges like LocalBitcoins.
The situation has worsened over the past few weeks as the government has scrambled to tame the USD/Bolivars rate but shutting down avenues for liquidation. At the time of writing, 50k Bolivars equals to $1 while 1 Petro (PRT) is pegged at $60.
The Maduro-led government asserts that each coin is more than a medium of value but a crypto asset, like Bitcoin, in an economy stricken by economic turmoil and world’s leading hyperinflation.10 BTC & 20,000 Free Spins for every player in mBitcasino’s Winter Cryptoland Adventure!
Venezuela Petro at a 50% discount at LocalBitcoins
According to sources in Venezuela, the government airdropped 0.5 Petro to government workers and pensioners claiming that their effort reached 6 million people. As a crypto asset, the objective of the government was to probably avail a shield for its citizens.Advertisement
However, it soon emerged that people used the same airdropped Petro to buy ordinary stuff through Point-of-Sale and government-supported Petro Wallets.
Both avenues were shut, paving the way for people to liquidate at peer-to-peer exchanges.
At LocalBitcoins, the value of each Petro was consequently priced at $30, 50% of what the government had set:
“You can go to “authorized by the government” exchanges, some of the offer the way of exchanging them, as it is free market and more people want to sell that people wanting to purchase, the price has dropped to 1 PRT around $30 (50%), of course a socialist government doesn’t like this, they say its price MUST be 60 USD. Some people are using LocalBitcoins to list Petros, but at the real market price of $30.”
Petro-Powered Casino in Caracas
Last week, the government approved the Humboldt Hotel to run a Petro powered Casino in Caracas, the country’s Capital.
Even so, the government didn’t specify which cryptocurrencies will be used to buy the Petro for use in this casino.
It is likely that Bitcoin, Dash, Litecoin, and other cryptocurrencies officially supported by the Petro Wallet will be allowed.
Maduro introduced the Petro, backed with the country’s reserve of oil and minerals, as an alternative to Bolivars, and skirt sanctions.
Venezuela’s Maduro announces sale of oil, gold using Petro
Venezuela‘s humanitarian crisis has been recognized as one of the most significant in modern history, while having failed to receive aid and pledges from donor nations. Venezuela has remained desperately underfunded throughout the crisis, with the country trying to launch several programs over the past few months to counter the same. In what is a recent development for the country, President Nicolas Maduro has announced that he will be setting up talks with the United States after months of international tension. In the meantime, Maduro also assured the country that this year, the country’s oil will be sold in its native cryptocurrency, Petro
In an interview with a Spanish journalist, Maduro noted that along with oil, other products like iron, steel, aluminum, and gold will also be sold in Petros. He said,
“We are going to sell Venezuelan oil in petros. We are already selling the iron and steel of Venezuela in petros. We also have a signed contract for the sale of oil, steel, iron, aluminum and we are going to sell part of the gold production in petros.”
Maduro asserted that the measure to use crypto was established in response to the economic sanctions imposed by the United States in 2019. He also claimed that the payment of pensioners and public employees through crypto in December was a good test of its use in daily transactions across the country.
“The essay has been going very well. The physical currency is not used, the town has had its petrogauinaldo and has been making it effective in its accounts. Some save it as savings in their petro-app, others have gone out to the market to buy things from the Decambrin era. The petro yields a lot.”
Petro, a cryptocurrency native to Venezuela, was announced by the President himself in October 2017, with sales beginning in February 2018. According to Maduro, Petro has proven to be successful and beneficial for the people of Venezuela.