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Venezuela’s President Orders State-Owned Companies to Accept Petro

Last Updated March 4, 2021 5:05 PM
Francisco Memoria
Last Updated March 4, 2021 5:05 PM

After officially launching the oil-backed Petro (PTR), Venezuela’s own cryptocurrency, the country’s leader Nicolás Maduro has ordered state-owned businesses to transact in it when buying and selling products and services. According to a video posted on Twitter by local television network VTV , the Venezuelan president ordered these businesses to convert a percentage of their sales and purchases into the Petro. He stated (roughly translated):

“[I gave the order to] PDSA, Pequiven, and CVG to, as state-owned companies, realize a percentage of their product sales and purchases, from here on out, on the Petro currency.”

Maduro specifically mentioned three companies: PDVSA, Pequiven, and CVG. PDVSA is a state-owned oil and natural gas company, which just like the Venezuelan government was targeted by the US’ sanctions. Pequiven is a petrochemical company. CVG stands for Corporacion Venezolana de Guyana, which is a decentralized conglomerate whose subsidiaries include precious metal producers. Maduro’s words came during the Petro pre-sale announcement. He also added that Venezuelans will be able to pay for fuel and tourism services in cryptocurrencies, including the Petro. As covered by CCN.com, cryptocurrencies are popular in the country, as they help citizens survive government failures.

The Petro was created as a way for the country to bypass US sanctions. The cryptocurrency’s pre-sale is currently ongoing, and according to Maduro the country’s government netted $735 million in its first day, although he didn’t back his claim with any evidence. Shortly after the cryptocurrency was announced back in December, Venezuela’s opposition-run congress criticized its sale, as an “illegal and unconstitutional” instrument to mortgage the country’s oil reserves. Yet, merely one day after launching the Petro’s pre-sale, Nicolás Maduro announced another cryptocurrency, the Petro Gold. While the first is backed by oil, the Petro Gold is set to be backed by precious metals. On a televised speech, Maduro stated:

“Next week I‘m going to launch the petro gold, backed by gold, which is even more powerful, that will strengthen the petro.”

It isn’t clear if the Venezuelan president referred to the gold reserves in the central bank, or to an undeveloped mineral deposit. Seemingly following Venezuela’s footsteps, other countries are now looking into launching their own cryptocurrencies. As covered by CCN.com, Iran recently backpedaled on bitcoin, and is now planning its own state cryptocurrency. A Turkish politician has also endorsed the idea of a national cryptocurrency, the Turkcoin.

Featured image from Shutterstock.