Venezuelan President Nicolas Maduro has ordered his country’s biggest bank to accept petro, an oil-backed crypto currency that, economists suspect, would one day plunge the South American country into a financial mess.
Following the order, the Bank of Venezuela (BoV) will set up special desks at all its branches across the country for accepting the digital currency.
The order comes weeks after Maduro announced plans to distribute one million petro wallets among his country’s young citizens.
Venezuela is increasingly banking on crypto currencies in an apparent bid to circumvent US sanctions on its trade and protect its citizens from skyrocketing inflation. Already, the country’s currency, the bolivar, is pegged to the petro.
A few months ago, Maduro announced a cryptocurrency-based remittance service called Patria, allowing people from around the world to send Bitcoin (BTC) and Litecoin (LTC) to Venezuelan citizens.
He even went to the extent of persuading foreign governments to pay him in petro for oil exports. The United States has banned its citizens and businesses from dealing in petro.
The Bank of Venezuela is the main financial services provider in the country and has a huge number of customers. Maduro’s decree will likely turn it into a kind of crypto currency exchange, say analysts.
Many international experts see petro as a scam, because a large majority of Venezuelans do not know how much it is worth and what benefits it would bring them.
Countries with a clean financial system have kept crypto currencies at bay. That’s because digital currencies are not reliable and vulnerable to volatile fluctuations. More than anything else, it is hard for central banks to regulate such transactions.