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Venezuelan Petro Cryptocurrency is a ‘Scam’, Say Local Merchants
Osato Avan-Nomayo · @OsatoNomayo | Feb 03, 2020 | 16:00
Retail merchants in Venezuela are refusing to accept Petro payments as hyperinflation is causing massive devaluation upon liquidation of the crypto at the banks. Meanwhile, the country’s government has reintroduced price control inspectors as part of efforts to pressure stores into accepting the country’s state-issued digital currency.
Merchants Call Petro a Scam
According to Venezuelan media platform Tal Cual, merchants in the country have abandoned Petro as a payment method. Reports say merchants who tried to liquidate their petro holdings at the Bank of Venezuela received devalued Bolivar amounts.
The reason for this devaluation is because the central bank used the petro rate at the time of purchase. However, with the Bolivar losing close to 99% of its value in 2019 alone, merchants are seeing their Petro stash liquidated for the equivalent of “pennies on the dollar.”
Commenting on the situation, Josefina Salvatierra, executive director of Consecomercio — Venezuela’s National Council of Commerce and Services, remarked:
The few who are liquidating are doing so to the indicator of the moment in which the sale was made, which obviously aggravates the situation even more because in a hyperinflationary process it is very difficult to sell on credit without practically indexing the debt.
According to Salvatierra, merchants that accept Petro payment risk being unable to restock their inventories given the massive hyperinflation in the country.
Former President of Consecomercio, María Carolina Uzcátegui, went as far to call the cryptocurrency a scam, according to the local report.
The petro is a scam for the merchant, because undoubtedly what he could do at the beginning of the year with that money is not the same thing he can do at this time
Maduro Administration Reintroduces ‘Price Police’
Venezuelan retailers and the government may soon clash over accepting Petro with the Maduro administration reintroducing the ‘price police.’ According to the Wall Street Journal (WSJ), the government is tasking a team of inspectors with the job of enforcing price controls across the country.
For the government, the move is part of efforts to curb hyperinflation. However, critics point to the policy of enforcing Petro acceptance as further proof of Maduro’s attempts to tighten its control of the country’s economy.
Retailers successfully ditching Petro will strike a blow to the government’s aim of ensuring broad-based utilization of the state-issued crypto in the country. Since its introduction, the Maduro administration has tried to push its Petro agenda with limited success.
As previously reported by Bitcoinist, President Maduro ordered airlines operating in Caracas — the nation’s capital, to buy aviation fuel using Petro. The country has also tried to incorporate Petro into its foreign trade deals with the likes of Russia and India.
Do you think the government will be able to force retailers into accepting Petro as a payment method? Let us know in the comments below.
Images via Shutterstock
