Venezuela Passports Can Only Be Purchased With Petro Cryptocurrency

by Ike Obudulu Posted on October 6th, 2018

Caracas, Venezuela : New passports will cost two Petros, which is equivalent to 7,200 bolivars, or four times the national monthly minimum wage, Venezuela Vice President Delcy Rodriguez said in a televised press conference from Caracas on Friday.

Venezuelans seeking to escape their country’s hardships now face another hurdle: getting their hands on the government’s elusive Petro cryptocurrency to pay for their passports.

President Nicolas Maduro announced a revamped Petro at an event last week almost eight months after what was supposed to be its initial launch date. The token is meant to be backed by oil and mineral reserves and is scheduled to go on sale starting Nov. 5.

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 enforcement could make it even more difficult for Venezuelans to travel abroad, with the country practically cut off from the rest of Latin America by major carriers. Avianca, Latam Airlines, United Airlines, Aeromexico and Deutsche Lufthansa are among a long list of airlines that have have stopped servicing Venezuela.

Venezuela expects its petro cryptocurrency to break the economic blockade imposed by the United States on the republic, the country’s minister for higher education, science and technology said.

On Monday, Venezuelan President Nicolas Maduro announced that the country had launched a national blockchain of the petro cryptocurrency. According to him, the new measures enable any Venezuelan to register in the blockchain and acquire petro for convertible currency.

“We expect to break the economic blockade. We, President Nicolas Maduro, drew on the ideas of Commander-in-Chief [late President)] Hugo Chavez while creating this amazing structure [Petro], and the world’s largest rating agencies recognize that this is a great way to break the blockade organized by the United States,” Roa said.

Meanwhile, the Bolivian republic’s Agriculture Minister Wilmar Castro Soteldo said that Venezuela’s petro cryptocurrency is an “important instrument of liberation” for the national economy enabling global players to carry our transactions in the sanction-hit country without fear of subsequent penalties.
On Monday, Venezuelan President Nicolas Maduro announced that the country had launched a national blockchain of the petro cryptocurrency. According to him, the new measures enable any Venezuelan to register in the blockchain and acquire petro for convertible currency.

“[Petro] is an opportunity for all global operators of cryptocurrencies and crypto assets to carry out transactions in the country without fear of persecution, because I believe it is an important instrument of liberation,” Castro Soteldo said.

The minister stressed that the Venezuelan government provided support to petro, including that “in legal terms.”

Petro was released into circulation on February 20, and is the first oil-backed cryptocurrency in the world. One petro equals one barrel of Venezuelan oil, or $60.

Since August 20, Venezuela has had two currencies ― petro and the sovereign bolivar, which was introduced to replace the bolivar over its hyperinflation caused by falling oil prices and general economic crisis in the country. The bolivar also remains in use for the transition period.

Venezuelan President Nicolas Maduro earlier announced that the government-backed cryptocurrency, called the petro, will be used in international transactions starting from October 1.

“On October 1, the petro will enter the streets to become a means for commodity exchange, purchase and convertible currency for the whole world,” Maduro said on on state television Thursday.

Venezuela has become the first country to launch an oil-backed cryptocurrency. Petro sales started in March after a month of presales.

Maduro ealier established a single exchange rate linked to cryptocurrency ‘Petro’

Caracas has launched its own Petro cryptocurrency backed by the country’s oil reserves amid country’s severe economic meltdown. Venezuelan President Nicolas Maduro said Friday night that the country would create a single exchange rate that would be linked to petro.

Maduro said in August the foreign exchange rate of the petro cryptocurrency would be fixed at $60, or 3,600 re-denominated bolivars.

Venezuelan President vowed earlier he would raise the minimal wage to 1,800 new bolivars from the current 30 redenominated bolivars on August 20, ahead of the transition to petro and the slimmed-down bolivar. Venezuelan state-owned oil company PDVSA will also carry out all transactions in the petro cryptocurrency starting from August 20.

“The new bolivar will be issued on August 20 and will be tied to the petro [cryptocurrency]… We will also knock five zeros off the bolivar,” Maduro said on national television.
Meanwhile, the annual inflation rate in Venezuela reached 82,766 percent in July.

“The inflation rate in July was 125 percent, accumulated inflation – 10,664.7 percent, annual inflation – 82,766 percent, daily inflation – 2.7 percent. This is why Venezuelans are protesting on the streets. There is no salary or pay raise, as they are taken away by hyperinflation,” Venezuelan parliament Finance Commission Rafael Guzman wrote on Twitter.

The economic situation in the Latin American country has deteriorated due to the deficit of goods, accelerating inflation, a fall in the government’s revenues driven by dropping oil and gas prices, as well as mass protests in the country.

In May, US President Donald Trump signed an order prohibiting US citizens and legal bodies from making any transactions involving debts tied to the Venezuelan government debt as well as preventing Venezuelan officials from selling equity in any government-owned entity, including PDVSA, as part of its tightened sanctions on the country’s government. This step followed Maduro’s re-election, which Washington has criticized as unfair.

The Venezuelan government took over currency controls in the country in 2003. The old bolivars will be phased out starting this weekend, with the new currency being pegged to petro.

Image : Pictured is a passenger presenting her documents at a special check point of the state currency board Cadivi in the Simon Bolivar airport in La Guaira, outside Caracas

 

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Ike Obudulu

Ike Obudulu

Versatile Certified Fraud Examiner, Chartered Accountant, Certified Internal Auditor with an MBA in Finance And Investments who has both worked for and consulted with some of the world's largest companies on main street and wall street in over 20 countries, Ike brings his extensive reporting and investigations experience to bear on his role as Chief Editor.
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