Venezuela has been in economic trouble, and two months ago, president Maduro changed tactic by issuing a new domestic currency which will scale down the volume of currency traded at the moment. The Bolivar Soberano will essentially be a scaled-down version of the current Bolivar Fuerte, with five zeros removed from its value. Further to this, it will be anchored to Petro, the oil-backed crypto launched by the country in February. The token itself will be backed by oil and mineral reserves. Also, the Venezuelan president has stated that all the oil purchases in and out the country must now be paid with Petro.
According to Venezuelan officials, the Petro is backed by 5 billion barrels of un-extracted petroleum and will, therefore, battle the soaring inflation in the country. Many critics question if the currency exists at all since it is difficult to track if there is any value behind the cryptocurrency and that there has not been a sign of the cryptocurrency’s existence in Venezuela.
The Petro is supposed to launch in November, and Maduro states that the official website has already been launched. The official wallet is already available in Google Play, but the public sale will not start until November 5th. The cryptocurrency will also eventually be tradeable on some of the biggest exchanges, such as Binance and OKEx.
However, the vice president, Delcy Rodriguez said in a press conference on Friday, October 5th, that ahead of Petro’s official launch, fees for all passport applications will only be payable in Petro, and will cost an increased amount of two Petros for a new passport, which is equivalent to 7 200 bolivars, and one petro for an extension. What is worth mentioning is that the average monthly minimum wage in Venezuela is four times less than the cost of the raised passport fee, according to a statement from Bloomberg. According to Blomberg the reason for the high fees could be due to the scarcity of the passports.
“Venezuelans already spend days in queues hoping to apply, and secure passports since lack of materials and rampant corruption have made official documents scarce. An intensifying economic and humanitarian crisis means that an estimated 5,000 people leave Venezuela daily, according to the United Nation’s latest data”.
The Petro enforcements could make it even more difficult for Venezuelans to travel abroad and the country will practically be cut off from the rest of Latin America.
Image Source: “Flickr”
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