Venezuela Ties Economy to Petro Cryptocurrency
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Aug. 14, 2018
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President of Venezuela Nicolas Maduro announced a new system of salaries and prices, tied to the national cryptocurrency Petro. The novelty will be implemented in the country starting August 20, the local media Telesur TV reports.

According to the country’s leader, the switch will stabilize the income and the situation of workers significantly. Now, in his opinion, scammers will not have opportunities for fraud, since prices will be tightly tied to the national currency. He also explained that, during the first stage of transition to the new system, two monetary units - Bolivar and Petro - will be in the country at once.

Maduro also announced carrying out of explanatory works throughout the country, within the framework of which government specialists will explain the peculiarities of new monetary units to the population. In conclusion, the head of state expressed his hope that on August 20 the "new history" will begin, and by 2020 Venezuela will restore stability and ensure social and economic prosperity. According to the president, the nature of economic development "will not be dependent or parasitic."

WHY IS IT IMPORTANT?

1. Venezuela is experiencing a protracted economic crisis. Inflation, according to the country’s congress, in June 2018 exceeded 46,000%. The IMF predicted that by the end of the year, inflation could reach 1 million %.

2. In March, Nicolas Maduro promised to hold a denomination, in which the bolivar would lose three zeros. The new banknotes were going to be released on June 4, but this did not happen. Last month, the authorities again announced their intention to hold a denomination of the local Bolivar, removing five zeros from its face value and tying it to Petro. The new national currency is given the name Bolívar Soberano ("sovereign bolivar").

3. Petro cryptocurrency has proven to be unpopular since its launch in February 2018 as it’s almost impossible to purchase. The currency is also banned in the U.S.

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