President Maduro Forces Venezuelan Banks to Accept Dubious Petro Cryptocurrency

For many in the digital currency community, the idea of a state-backed cryptocurrency would be anathema to the ideals of digital tokens. Most cryptocurrencies are designed to be decentralized and autonomous; big players like bitcoin and ethereum were designed at least in part as alternatives to central bank currencies. This is not the case, however, for the petro, the oil-backed, state-sponsored digital token of Venezuela. Since announcing the launch of the petro in the period of time over the last two years in which the cryptocurrency space has grown by leaps and bounds, the broader digital currency world has been unsure of how exactly to address this new entrant. Now, the Venezuelan president, Nicolas Maduro, has reportedly ordered banks in Venezuela to adopt the petro, according to CCN.

Sudeban, Venezuela's banking sector regulator, passed a resolution stipulating that financial institutions in the troubled South American country must guarantee that their financial information is reflected in the petro as well as the bolivar, the country's fiat currency.

Venezuela has been plagued by crippling inflation and a critical shortage of food products, among other economic troubles. Maduro is likely forcing the adoption of the petro as a unit of account in order to attempt to ease the crisis that has been ongoing for several years. The International Monetary Fund has predicted that the Venezuelan inflation rate will reach 1,000,000% this year.

The petro was launched more than six months ago, but it has not received much attention since then. Earlier in August, for example, Maduro announced that the crypto token would become the official currency of state oil and gas corporation Petróleos de Venezuela, S.A.

Speaking in a televised address, Maduro explained that "as of next Monday, Venezuela will have a second accounting unit based on the price, the value of he petro." He added that "it will be a second accounting unit of the Republic and will begin operations as a mandatory accounting unit of our PDVSA oil industry." In a period of just a few months, the petro has come under intense criticism; some analysts suggest that it is neither backed by oil supplies nor is it a cryptocurrency at all.

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