Venzuela’s economy is going down in ashes, leaving behind residue of mass-movements and hyper-inflation. The country, now in the fourth year of recession, is in crisis as basic goods and public services are paralyzed.
In hope of rescuing the sinking ship, Venezuela’s authorities issued new currency this Monday. In a tweet, President Maduro called this move a ‘revolutionary’ formula that will help Venezuela to set down the crutches.
Hemos encontrado la fórmula revolucionaria que pone al trabajo como centro para el reequilibrio general de la sociedad, basado en la producción de bienes y la remuneración del salario. Con ella acabaremos de forma definitiva el modelo perverso que dolarizó los precios en el País. pic.twitter.com/BviRuvqRhD
— Nicolás Maduro (@NicolasMaduro) August 20, 2018
“We have found the revolutionary formula that puts work as a centre for the general rebalancing of society, based on the production of goods and the remuneration of wages. With it we will definitively finish the perverse model that dollarized the prices in the country.”
— President Maduro
The new “Bolivar Soberano” is equal to 100,000 old Bolivares and this move came into effect on Monday with banks remaining closed as the new currency took effect.
The re-branding of currency has re-sparked interest in the cryptocurrency that was announced months ago, Petro. In January, a sovereign crypto asset backed and issued by the Bolivarian Republic of Venezuela was launched on a blockchain platform with the purpose of promotion of an independent, transparent digital economy, open to direct citizen participation as well as a platform for the development of crypto assets and innovation in Venezuela.
The minimum exchange unit for Petro (PTR) is Mene (0.000001). Interestingly, this is a word from Wayuu, the second most spoken language of Venezuela, meaning: PETROLEUM. A reasonable word play as the cryptocurrency was referenced to the price of the barrel of the Venezuelan oil basket of the previous day with a percentage discount.
The launch of a new currency amidst the chaos of a crumbling economy wasn’t taken open-handedly by the critics but the responsibility to promote the cryptocurrency was assumed by the government itself with the commitment to promote its adoption and encouraging the growth of its national and international user base.
The initiatives for this purpose include (but not limited to):
● Promotion by PDVSA (Petróleos de Venezuela, S.A) and other public and joint ventures, as well as national public entities and regional and local governments.
● The payment of extraordinary labor commitments and benefits in Petro.
● Tax incentives for companies that incorporate the use of Petro in their commercial
A total of 100 hundred million Petros are to be issued with 44.0% to be available for the initial public offering of the cryptoasset, 38.4% for private sale and 17.6% for retention by the Venezuelan Superintendency of Cryptocurrency and Related Activities (SUPCACVEN).
The establishment of Petro as a currency was to made in two steps: a pre-sale and an Initial Coin Offering (ICO). Pre-sale was scheduled on February 20, 2018 and consisted of the creation and sale of an ERC20 token on the blockchain ethereum platform, while the ICO was to be made when the eighty-two million four hundred thousand (82,400,000) units available for sale were exhausted.
Petro can be bought by either receiving Petro tokens VEN: PTR from any holder that has acquired VEN: PRESALE in the presale, in the initial offer open to the participation of the general public, or the secondary market once the initial offer process has been completed. One point that is to be kept in mind is that after the sale, the Venezuelan State will not be able to make new emissions from the cryptoactive Petro.
Four different voices are being heard regarding Petro:
1. The Government is hopeful that Petro will be the turning point to a better Venezuelan economy.
2. The opposition leaders claim that the sale constitutes an illegal issuing of debt and is a ploy for corruption.
3. The US Treasury Department warned that Petro may violate sanctions imposed last year, which is kind of the real purpose.
The fourth voice is of the general population that wish for the troubled Venezuela to pull through the crisis and regain balance and vie for economic stability and financial independence, the likes of which they haven’t been seeing for a long time now.