Venezuela’s government plans to present its national cryptocurrency, the Petro, as a unit of account for international crude oil trade to the Organization of Petroleum Exporting Countries (OPEC). The move is a further attempt by the country’s government to strengthen the position of its controversial state-issued cryptocurrency.
Petro as a Unit of Account for International Crude Oil Trade
According to local media sources in the Latin American nation, Venezuela wants to utilize the Petro as a unit of account for the commercialization of its crude oil. The head of Petroleos de Venezuela, the state-owned oil company, Manuel Quevedo, says from 2019, all Venezuelan crude oil will be traded for the Petro.
For Quevedo, the move is a continuation of the government’s drive to legitimize the controversial cryptocurrency. Quevedo, who also doubles as the nation’s Minister of Oil and Mining, said that the cryptocurrency formed an integral part of Venezuela’s economic recovery and growth.
This move isn’t the first time that Venezuela will be pushing a cryptocurrency agenda to OPEC. In February 2018, President Nicolas Maduro urged the cartel to adopt a common oil-backed cryptocurrency. The country also tried to woo India with a 30 percent discount for crude oil imports, but India declined the offer.
Circumventing US-led Economic Sanctions
There are more than apparent incentives for the country to push for such an agenda with OPEC. Using the Petro as a unit of account for international oil trade provides a needed boost for the much-maligned cryptocurrency. It also provides an avenue for the government to achieve one of its stated aims for the Petro – circumventing US economic sanctions.
Meanwhile, the country continues to grapple with a collapsing economy, hyperinflation, and an otherwise worthless fiat currency. To survive, citizens have since turned to Bitcoin and other cryptocurrencies like Dash. The country continues to break new records for BTC trading volumes of p2p trading platform Localbitcoins.
Against the backdrop of such bleak economic conditions, the government continues to advance the Petro agenda, albeit against vocal opposition from critics both within and outside Venezuela. Keen to get the cryptocurrency in everyday use, the government mandated banks to accept the Petro. Recently, the cryptocurrency also became the accepted means of payment for international travel passports.
Do you think Venezuela’s plan to use its state-owned cryptocurrency as a unit of account for international oil trade has any merits? Let us know your thoughts in the comment section below.
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