A Hybrid Economy? Venezuela Expands Petro Utility With In Store Fiat Conversions

According to a report in BeInCrypto Español, Maduro explained that those holding the Petro could now exchange the state-issued digital currency for either national or international currency. He stated:

“If I have two petros saved, those petros today are convertible currencies, that is, about $ 120. I can go to any store that sells convertible currencies and buy (the currency I want).”

¡Buena Noticia! Hemos decidido premiar a los 3 millones de ahorristas del Petro, que han confiado en esta iniciativa. A partir de hoy #22Oct, su ahorro en Petro podrá ser canjeado en divisas convertibles para que hagan las compras que deseen. ¡Petros Convertibles para el Pueblo! pic.twitter.com/W0KvIIf7oD

— Nicolás Maduro (@NicolasMaduro) October 23, 2019

Powering the Petro

The move builds on announcements to strengthen the utility of the Petro made earlier in October. Maduro outlined big new funds backed by the Petro, along with a benefits program for workers in the nation’s important metal mining industry. José Ángel Álvarez, president of the National Cryptocurrency Association, gave an exclusive comment to BeInCrypto Español about the increasing functionality of the Petro:

“With these measures, the Government seeks to make Petro a currency of exchange that competes face to face with the Bolivar, giving the possibility of a hybrid economy never seen in any country.”

Venezuela’s Petro is the first purely digital currency created by a world government. It is reportedly backed by a basket of physical assets. These include oil, gold, diamonds, and other metal reserves. The currency is supposedly capped at 100 million units. However, lacking the robust security model of Bitcoin and other decentralized digital assets, just how permanent this cap is remains to be seen.

Fixing the Economy

Increasing utility of the digital currency has been well received by some citizens in the nation. Jenny Rodríguez, a worker at an aluminum firm, appreciated the Petro’s stability relative to the national bolivar:

“Yes, from my point of view it is better… In my Homeland purse, what falls in Petros saves [value] and has earned me a lot of interest.”

She added that greater acceptance of the currency in Venezuela may eventually mean that the currency never needs to be exchanged at all. Venezuela has plagued by economic crises for many years now. The Petro is part of the government’s efforts to stabilize the nation’s economy and reduce its dependency on foreign currency. The government is also believed to own an unknown quantity of Bitcoin (BTC) and Ether (ETH) as part of its reserves. Bloomberg previously reported that the South American government was exploring the use of crypto assets to bypass economic sanctions.

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Images are courtesy of Twitter, Shutterstock.

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