Venezuela urges neighbouring states to accept petroleum

The president of Venezuela Nicolás Maduro has proposed to the members of the ALBA-TCP trade pact to accept the crypto currency Petro, which he had planned. This serves the „courageous“ and „creative“ integration of the 21st century, Maduro tried to convince the governments of the ten other nations of his intention.

Meanwhile, the Venezuelan parliament announced that it would ban the Bitcoin formula

Last Friday, an extraordinary meeting of the Political Council of the Bolivarian Alliance for the Peoples of America (ALBA-TCP) was held in Caracas. This is both an economic and a political alliance consisting of a total of eleven states of Latin America and the Caribbean. The alliance, founded by Hugo Chávez, is intended to be an antithesis to the free trade area ALCA planned by the USA: At the end of the extraordinary meeting, Maduro proposed to the „brother governments“ the integration of his planned crypto-coin Bitcoin formula. Maduro believes that his currency will replace all previous currencies that are already being traded. The head of state predicted the introduction within the next few days.

This declared the Petro in advance as illegal

The president, however, receives a strong headwind from the parliament, which is controlled by the opposition. In Parliament’s view, the new crypto currency should require approval because it is a form of debt collection. Each Petro-Coin should be deposited with a barrel of oil from Venezuela’s reserves. The opposition publicly frothed over the sale of the country’s fossil fuels. Opposition politicians were quoted in the press as saying that the petroleum also opens the door to corruption. The securities deposited would be void if the current head of state were to lose the next election. Even if Maduro can successfully circumvent the US sanctions with the help of the crypto currency, the ban should considerably reduce the attractiveness of the new coin for investors. Maduro hopes to raise $5.9 billion from the Petro to modernize the domestic economy.

Since Maduro’s defeat in the parliamentary elections there has been a real stalemate, paralysing the country. The Venezuelan President has repeatedly ignored the orders of the parliamentary majority because he is protected by the Constitutional Court, which repeatedly blocks the laws passed by Parliament. It is therefore still completely unclear at this stage whether the crypto-petro will come in the coming days. One thing is certain: If Maduros party wants to win the next elections, something must happen. The country is suffering from galloping inflation and a rapidly spreading shortage of food and medicines. It remains to be seen whether Petro will be able to lead the nation out of the deep crisis as hoped. Maduro twittered that the meeting of the ALBA-TCP states had strengthened „friendship and cooperation“ between the nations. However, he did not comment on how his proposal was reacted to last Friday.