Venezuela has announced that it is raising the status of its state sanctioned cryptocurrency to become a second official currency.
In the midst of a large scale monetary crisis involving hyperinflation and radically unstable currency, Venezuela, under the administration of president Maduro, has released a state-backed cryptocurrency, the Petro, which is tied to the South American nation's oil reserves, by far the most significant economic export and a fully nationalized industry.
According to Reuters, the Venezuelan government is making legislative changes to elevate the cryptocurency to a similar standing as the still-dominant state issued currency, the Bolivar, which is increasingly unusable because of the monetary crisis.
According to ABC International, Maduro is also enacting the Petro as an 'official accounting unit' and anchoring a new salary and pension system to the digital currency, which he claims "
"will mean a substantial improvement in the income of the workers."
While the cryptocurrency has been technically operational since April, it isn't clear that it is in actual practical use, though previous reporting has indicated that other cryptocurrencies are being used to some extent to circumvent unstable currency concerns.
¡Ahora van a querer pagar las deudas con "petros"! para tratar de darle vida a ese invento que en verdad es una emisión de deuda externa sin autorización de la @AsambleaVE. ¡Cuidado con los vendedores de humo!— Marialbert Barrios (@MarialbertBs) February 21, 2018
The Petro cryptocurrency has been nothing if not controversial, with Marielbert Barrios, a politician in Venezuelan's national assembly tweeting of the cryptocurrency "¡Cuidado con los vendedores de humo!," Spanish for "Beware those who sell smoke!" Barrios highlighted the fact that a country with extreme hyperinflation which is defaulting on their debts is not in a good position to legitimately sell a digital currency.
Especially with the digital currency already barred from US trade by executive order, it's unclear how the Petro will improve either the financial well being of Venezuelans, or usher in stability for the Venezuelan Republic.