Venezuela Says Government Bodies Must Soon Accept Cryptocurrency

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(Bloomberg) -- Venezuela’s oil-backed cryptocurrency, the Petro, must become legal tender for all transactions involving government institutions -- from ministries to airports -- within 120 days, according to a proclamation in the government’s Official Gazette.

The government will be the sole regulator of all crypto assets, and the newly created national Cryptocurrency Treasury will be in charge of overseeing everything from their emission to trading, according to the gazette dated April 9. Separately, the government Tuesday named Abrahan Landaeta to head up the Cryptocurrency Treasury and Anthoni Camilo Torres as head of virtual exchanges.

The decree is meant to jostle the Petro into use, but a host of challenges may make it difficult to put the crypto policy into practice, with many aspects of the token remaining a mystery and rating sites are already calling it a scam. Last month President Nicolas Maduro said Venezuela had received offers of as much as $5 billion from countries including China, Russia and Mexico for the coins -- yet there’s little evidence of that support.

With the Petro, Venezuela is seeking to take advantage of global enthusiasm for blockchain-based assets and help lift its economy out of one of the world’s deepest recessions amid a crippling shortage of hard currency. The International Monetary Fund forecasts inflation will hit 13,000 percent by year-end, while the economy is set to contract 15 percent.

In a speech last week, Maduro said the country had purchased 30 ambulances using the virtual coin. As part of the nationwide effort to boost Petros and other cryptos, a national virtual miner registry was opened and “Petro zones” where the coins will be accepted were created in popular tourist destinations along the country’s western border.

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