Consecomercio, or rather the National Council of Commerce and Services of Venezuela, has taken the time to issue a public statement earlier this week. Within, the Council makes its position regarding cryptocurrencies clear, especially in regards to the state-backed cryptocurrency, the petro coin.
Crypto’s Importance to Venezuela
José Miguel Farías, a member of Consecomercio’s Economics Commission, published the official statement of the Council via twitter.
Comunicado de la Comisión de Economía de Consecomercio en referencia al decreto que obliga a las personas jurídicas y naturales a llevar una doble contabilidad, tanto en Bolívares como en Petros???????? pic.twitter.com/p1eLJY4En5
— José Miguel Farías (@Jmfariasu) November 8, 2019
The report made it clear that there was a consensus among the businesses of Venezuela that crypto played a critical role within the country’s economy. However, the group considers President Nicolas Maduro’s state-owned cryptocurrency, the petro, as a rushed project that needs time for assimilation.
The council explained that the petro faces a wide range of flaws and issues from its creation, which makes it difficult to determine its function in Venezuela’s economy. The council considers the importance and relevance of crypto in Venezuela as something that cannot be denied. The reason for this is cited as the limitations forced upon the country’s companies and citizens. The barriers come in terms of the difficulty of mobilizing the country’s money.
The Council considers it paramount to make the critical issues with the petro abundantly clear. The council is of the opinion that general uncertainty about the currency has created a mistrust of cryptocurrency technology as a whole. They said that the question about whether the petro should be used as a unit of account, a store of value, a way to pay salaries, or even as if it should be used as a currency trading reference, have remained unanswered.
Farías explained crypto’s widespread use had enabled Venezuelans abroad to send remittances to their home country. Farías continued by pointing out that the bolivar is being used less and less in the country’s transactions. Cryptos are thus essential to keep the cash flowing within the country’s economy.
Lack of Consistent Value
It’s only been a week since President Maduro, who originally created the petro to sidestep US sanctions and boost the country’s economy, mandated the so-called “double count.” This requires all companies, private or public, to express their accounting records in both bolivars and Petros as two separate tallies. The same goes for merchants issuing invoices, now being mandated to show both the amount in both currencies. Even legal transactions and paperwork have to be done and registered in both Petros and bolivars.
The matter seems simple enough until one accounts for the fact that there isn’t any “set” determination of a Petro’s value. The “Official” value equates one petro as 1.78 million bolivars (or about $60). At the same time, state decree mandates that a single petro is worth exactly 80 000 bolivars. The national exchanges fluctuate the Petro’s value during this time, making neither of these three coherent with each other.