Cryptocurrency industry is perhaps at a crossroad with respect to mass adoption and government-backed transactions given the scale of adoption and implementation of executed by the Venezuelan government with the latest being paying its pensioners in the state-backed Petro crypto.
As an economic crisis in the oil-rich country of Venezuela becomes imminent, the government has been experimenting avidly in order to control the years of hyperinflation in the country.
In its latest move, the government has reportedly, switched the fiat-currency of the nation bolivar which was credited to accounts of pensioners being converted into oil-backed Petro, the cryptocurrency.
The government practice is to send notifications to pensioners when the amount is deposited into their accounts. This time, however, it was slightly different as these pensioners received a second notification that they are being offered Petro since the funds were vital in terms of the “concept of savings in Petro.”
Sources such as the Caracas Chronicles says that the government had actually deposited the national currency – bolivars into the pensioners’ account after which they have issued the Petro, which is a digital asset which is backed by oil.
This is a critical move by the government since pensioners who depended on the bonuses offered by the government in order to survive due to inflation reaching as high as 200,000% was unmanageable.
Government directs banks to adopt Petro
The government has already issued an official directive to the local banks to increase the adoption of the Petro and continues to recognize this currency as the alternate commercial product which can be used in transactions in the country.
This is perhaps for the very first time that an elected government has declared the decentralized network digital asset as an alternating currency. However experimental the move, it does provide a real-time example of the uses and the adoption of such non-fiats at the national level and the impact, repercussions and the issues arising from such adoption for the very first time.
Hence, the engagement of the government with the Petro is a closely watched event and there is a lot of pressure on the administration to ensure that the country’s transition into the digital currency phase is without glitches and is modular so as to ensure value justification for the fiat-currency.
The government is also considering accepting Petro payments for exports of Petroleum and other oil forms. Petro savings plan or certificates of saving are already in use in the country.