Contents
Key facts:
The Government of Venezuela announced the Petro may be converted into foreign currency.According to Nicolas Maduro, in the coming weeks there will be “more surprises” with the petro.The president of Venezuela, Nicolas Maduro, announced on Tuesday night that the venezuelans who have saved in the criptomoneda petro for a year and a half, will be able to convert foreign currency this criptomoneda. Several economists consulted by Breaking News about it, they cautioned that this measure will fail by being inconsistent, unworkable financially and also because it does not correct the present economic distortion of the country.The representative noted that since this Tuesday, October 22, and through the mechanisms implemented by the Superintendence of Criptomoneda (Sunacrip), the Central Bank of Venezuela (BCV) and the Vice-presidency of Economy, will proceed to convert all the Petros of more than 3 million savers in foreign currency so that you can buy in any business or trade,” he said Maduro.De according to the economist and qualifier of bank risk, Leonardo Buniak, the Government announced that “from now on the Petro, the theoretical criptomoneda issued by the venezuelan State, will be convertible into dollars. That means that every person who owns Petro will be able to exchange it freely for dollars, which does not represent any news, does not have any commercial impact unless it is marketable”.
Oh Good News! We have decided to reward 3 million savers Petro, who have relied on this initiative. From today #22Oct, your savings in Petro may be redeemed in convertible currency to make the purchases. Don Petros Convertible for the People! pic.twitter.com/W0KvIIf7oD— Nicolás Maduro (@NicolasMaduro) October 23, 2019
He explained that the cryptocurrencies are virtual money trust whose market value is a function of trust and credibility that you have as an instrument of payment, as a store of value or as a unit of account. On the basis of this reasoning, Buniak said that the criptomoneda can be received as long as the person supports, understands and wants that the criptomoneda add some kind of value.
Cryptocurrencies as Bitcoin, Ethereum and many other more have a market value because they are freely tradable, have supply and demand. The big issue here is that Petro is not a criptomoneda, is issued by the venezuelan State and has no market value, therefore, is non-negotiable and has a market value that is imposed by the venezuelan State that is USD 60 approximately. That is to say, that if Maduro ensures that you have two Petros, then I would have $ 120.Leonardo Buniak, economist
In this regard, the expert questioned, ”who is going to deliver, to buy, who’s going to break off of the dollar as the hard currency of the united States to receive Petros? Which is a putative criptomoneda that has no market value, and does not have a square or roll where it can be sold. As there are that say, the Petro is not listed on any page of criptomoneda, it is not tradable or marketable”.Buniak said that this proposal of the National Executive is going to fail, basically because the Petro is not a criptomoneda, according to your criterion, and for all those holders of Petro will not find anyone who will buy them. “Unless it’s the same venezuelan State that will make a repurchase of Petro and then the users to go to the BCV, and the entity issuer gives you your dollars. But then, here it is another concern what dollars? Venezuela presents a vertiginous fall in oil income, as a consequence of the low production of which is located in 644 thousand barrels per day”.He added that in the present, “Venezuela is suffering from a severe deterioration in its cash flow for the treasury and foreign currency. So the venezuelan State will not be a bidder, or a buyer of Petro, and with much difficulty could be.”
Not going with the Constitution
For its part, the economist expert in criptoeconomía, business finance and professor of Business School IESA, Aaron Olmos, emphasized that the announcement of Maduro is rude and out of logic.In terms of the intent of this measure, the specialist points out that the Government does not know if you want to give the Petro’s use as a tool of compensation of salary or grant features of legal tender. “We do not know if the mechanisms are the tools of the ecosystem Petro that are available, as are coin purses hot to the houses of change. This announcement has not been clear. What is certain is that it is not in line with the article 318 of the Constitution which reads that the national currency is the Bolivar. It seems that he is giving to the Petro range of free convertibility,” he said.At the discretion of the Elms, a story like this will generate greater uncertainty in the domestic market and more in this last quarter of the year, which provides for higher inflation. “This measure does not generate stability nor tranquility in an economy as distorted and partially dollarized as our own, because there is an absence of liquidity of the own bs”, comentó.De according to the scholar, do not understand how it continues to hold on to a restrictive monetary policy that does not allow you to circulate a larger amount of bolivars, but it opens the doors to the petro.
Here, another question that is worth that is how this course token by the government convertible will help to correct the distortions that there is with inflation and if this will allow the venezuelan to hold the currencies to cover their needs, knowing that the petro is still sanctioned by the U.S. Government since march, 2018. Rather than try and invent, the Government should give some stability to the Bolívar, in a market that has a contraction of nearly 30%, and with a productive activity of basic companies and the private sector to deteriorate.
According to Olmos, the ad is rude, unacceptable outside of logic , as evidence that the CENTRAL bank has no autonomy and gets to play in a position that is not well understood . Olmos said that this measure “is not going to translate necessarily to a substantial improvement of the well-being and quality of life of the venezuelan.Aaron Olmos, economist
Battle lost
Meanwhile, economist and Research coordinator of the Research And Training Center Working (CIFO), Reynel Alvarado, said that Maduro continues adding uses to the petro, an active, centralized Government-that until now, within a year of its creation has not had an impact on the economic recovery of the country.For Alvarado, this as evidence that the Government is on a wrong path. “The consumption in Venezuela has declined, there are currently some segments of the population with access to foreign currency that they have the capacity to buy. However, petro does not cease to be a policy quite questionable in his approach, is always changing. It may not generate confidence in a policy if every three months is changing your practice,” he warned.
What is real is that the venezuelan people are increasingly using the dollar as unit of account and a currency exchange. And the Petro unfortunately has the battle lost before that.Reynel Alvarado, economist
Another aspect serious to highlight by Alvarado is the misguided way to lead the national economic policy “surprises”, pulling “rabbits out of the hat”, which in his opinion, “it is a mockery to the population, because there is an economic program real, feasible, and goals, where you will glimpse an improvement in the economy.”
There are more surprises
According to Maduro, apart from the announcement about the criptomoneda and savers, he will go beyond, because “in the coming weeks I’m going to surprise you,” he said.The announcement was made in the framework of a workshop from the ground-Carton de Venezuela (Cartoven), located in Petare, Miranda state.For the successor of Hugo Chavez, “this is the first test that we’re going to go putting hard currency in the hands of the people. We started by the savers, for a prize, because they gave a demonstration of confidence in the Petro and confidence with award is paid”, he concluded.