Venezuelan Government Swapping Pensioner’s Money With Controversial Petro

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The Venezuelan government is reportedly converting monthly payments made to pensioners into Petros, the country’s controversial cryptocurrency.

The Caracas Chronicles, a political and economic affairs publication based in the country, made the revelation in a blog post published on December 12.

According to the publication, the government has over the last several days swapped bonuses paid to the elderly, usually in Venezuelan bolivars, with Petros.

The blog post clarifies that under normal circumstances, a pensioner gets a message alerting them that they have received their monthly bonus.

The money is always paid in bolivars, which the recipient moves to their bank account by visiting the page ‘patria.org.ve.’ once they transfer the money to their account, the pensioner then proceeds to their local bank to withdraw the funds in fiat.

But this seems to have changed, the blog explained, with recent messages sent to pensioners showing that the government has been converting the bolivars to the cryptocurrency petro immediately after releasing the funds to the retired citizens.

Rather remarkable, the Caracas Chronicles notes,  is the fact that it appears the government sent the fiat sums to the recipient’s web wallets first before proceeding to withdraw them and then replace that with petro coins of an equivalent value.

It isn’t immediately clear how the elderly citizens will use the cryptocurrency, bearing in mind that Petros is not used nor accepted widely in the country.

One option though, according to the site, appears to be the possibility to convert the crypto back into local fiat currency (bolivars), though that process could be quite intricate and challenging to the beneficiaries.

Even trickier for the affected individuals is the volatility aspect of the crypto; coupled with hyperinflation meaning that Petro’s value relative to that of the bolivar is highly unstable.

On December 12, the value of petro in sovereign bolivars (BsS) was 15,071.56, sharply rising from 9,000 in just a couple of weeks.

The move to use petros in the pension system isn’t entirely new, even if the manner it has been applied is quite surprising. The first hint that would happen came about four months ago.

At an August event, President Nicholas Maduro announced that the country would be pegging its pensions system to the petro.

Venezuela announced the controversial token in 2017, which at the time was revealed to be efforts geared towards advancing the country’s monetary sovereignty.

The introduction of the crypto, which the government has said is already in use despite contrary opinions, received widespread criticism with the country’s Congress calling it illegal and the U.S government moving to impose sanctions.

The Secretary for Economics announced in October that the crypto was available for public purchase, while requirements are that residents seeking passports will have to access services using petro.

Last week, President Maduro announced that the country would begin accepting petro in exchange for its oil.

The effort is meant to reduce the country’s reliance on the U.S. dollar, as well as to diminish USD’s dominance in the global oil market.

(Source: Caracas Chronicles)


Disclaimer: This is not investment advice. Cryptocurrencies are highly volatile assets and are very risky investments. Do your research and consult an investment professional before investing. Never invest more than you can afford to lose. Never borrow money to invest in cryptocurrencies.

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