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According to reports, the Venezuelan government is converting pension payments into its national cryptocurrency, Petro.
According to a Venezuelan news site, The Caracas Chroniclesretirees received two messages on December 7 informing them that their money would be in Petro's cryptography. The move was made without consent or notice.
Initially, pensioners would receive a message informing them that the payment had arrived. They would then log in to their account on patria.org.ve and transfer the funds to a bank of their choice. Spending a full day queued at banks waiting for the withdrawal.
Now, however, the funds are in Petro's cryptocurrency and there is no way to transfer the cryptocurrency directly to the banks, because the financial institutions in the country are not yet able to handle cryptography. With that said, there is a way to convert Petro into Bolivars on the Patria platform and the process is referred to as complex.
The features available on the Patria site include an option to link Petro and Patria wallets.
Problems facing Petro Crypto since the beginning
The Petro currency, backed by the state, was launched in October and is issued by the nation's treasury. It can be traded with other currencies such as the US dollar, euro and yuan and traded with other traditional digital currencies such as Bitcoin and Ethereum.
It was developed to circumvent US sanctions on the country. The sanctions concern the country's leadership, which has been accused of serious violations of human rights and corruption.
The Petro currency currently faces significant problems, especially when it comes to acceptability around the world. According to the US State Department, US citizens and companies can not negotiate with the Venezuelan government, regardless of whether transactions are carried out in fiat or digital currency.
Russia has also openly stated that it will not deal with Petro's cryptocurrency. This is what a recent statement by the country's finance minister Sergey Storchak states. The two countries have a common program to overcome economic sanctions.
Other countries, such as India, have previously refused to enter into agreements involving Petro. In June, Indian Foreign Minister Sushma Swaraj said that such an attempt would be against the policies of the Central Bank of the country, which restrict financial institutions from trading in digital currency.
Venezuelan Petro and phenomenal inflation rate
The Venezuelan economy has reached the historical inflation rate 833.997% within 12 months. This is according to a report published by the Congress in October. This puts Venezuela in first place on the list of countries with the highest inflation rates in the world. It follows the Democratic Republic of the Congo and Malawi, which have an annual inflation rate of around 22% and 21% respectively.
The Venezuelan government hopes that the Petro will support the tormented currency of the nation.
(Featured image credit: CNN)
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