Venezuela has reportedly begun converting pensioners’ monthly payments into its controversial cryptocurrency, the petro.
According to the Caracas Chronicles, an English-language politics and economics blog based in the country, the government has recently been taking the bolivars (the country’s current fiat currency) paid to its elderly residents and automatically swapping them for petros.
Normally, a pensioner would receive their monthly sum in bolivars, shift the funds to a bank account, and withdraw the fiat from a local branch, the blog explained. However, the government apparently converted residents’ bolivars to petros after sending the funds.
Notably, this conversion happened after the government first sent the payments in fiat to residents’ web wallets, meaning the Venezuelan government sent pensioners their funds, withdrew them and replaced with an equivalent value of petros.
How pensioners would be able to use their unrequested petros is unclear, as they are not generally accepted in stores for most other transactions. However, it seems to be possible to convert them back to bolivars via a complex process, according to the post. To make matters worse, the value of the petro relative to the bolivar is unstable, rising from 9,000 to more than 15,000 over the course of a few weeks.
Venezuela’s president, Nicolas Maduro, first announced that the petro would be used for the country’s pension system in August during a televised event.
The token was first announced last year as part of an effort to “advance monetary sovereignty,” though the proposal was immediately opposed by the National Assembly (and later sanctioned by the U.S. government).
While the nation claims to have successfully raised hundreds of millions of dollars – potentially as much as $5 billion –selling the token, it is unclear who has invested in it or how much has actually been raised.
Residents are already required to purchase passports using the cryptocurrency, and the nation’s public salary systems are also expected to begin using the petro.
More recently, Maduro said Venezuela will sell its oil for the petro, rather than the U.S. dollar, to decrease the dollar’s importance in the oil market.