Venezuela’s New National Currency Will Be Tied to the Petro, Says President
On Monday, August 20th, the president of Venezuela Nicolás Maduro announced a new currency will begin to operate in the country. Venezuela is transitioning from the Bolívar to the Bolívar Soberano (Sovereign Bolivar), and aims to fully replace the Bolívar to counter soaring inflation that is expected to reach a million percent this year. This new currency will be tied to its controversial oil-backed “petro” crypto token.
According to local news source teleSUR, the president said:
“The economic reconversion will start on August 20 definitively with the circulation and issuance of the new Sovereign Bolivar, the new monetary cone that is going to have a new method of anchoring the Petro,”
The change intends to straighten out the financial and monetary system of the country “in a radical manner,” Maduro said, “We have the correct vision of what the economic future in Venezuela should be, above all, we will achieve it.”
The petro, he added, “will end up being consolidated technologically and financially” and will come to “permeate all the national and international economic activity.”
In regards to the Venezuelan cryptocurrency, President Maduro announced that “it will end up being consolidated technologically and financially” to “permeate all the national and international economic activity”.
In February, Maduro announced that approximately 100 million of the tokens (claimed to be worth $6 billion) would be issued to overcome the financial sanctions imposed by the U.S.
In March, the U.S. responded, with Donald Trump signing an executive order imposing new sanctions against Venezuela over the petro.
Specifically, the executive order states:
“All transactions related to, provision of financing for, and other dealings in, by a United States person or within the United States, any digital currency, digital coin, or digital token, that was issued by, for, or on behalf of the Government of Venezuela on or after January 9, 2018, are prohibited as of the effective date of this order.”