Venezuela to Use Petro Cryptocurrency to Settle Trades With Russia: Report

The government of Venezuela is reportedly planning to settle trades with Russia by using the controversial Petro (PTR) cryptocurrency. This, according to a report from Russian government-backed media outlet RT (published on May 17, 2019), which mentioned that mutual trade agreements between Venezuela and Russia may also be conducted using the ruble.

Local news sources further noted that both Russia and Venezuela are looking to settle trades without using the USD.

$100 Billion Owed To External Creditors

According to Jorge Valero Briceño, Venezuela’s Representative to the UN Office in Geneva, Switzerland, Caracas is expecting the Kremlin’s support in helping the South American nation to restructure its foreign debt. Recent estimates indicate that Venezuela is indebted to foreign creditors by approximately $100 billion.

US-led political and economic sanctions against Venezuela, particularly those which apply to the country’s oil industry, along with freezing USD accounts, put tremendous pressure on the Venezuelan economy. This, according to Briceño, who also noted that Venezuela, which notably has the world’s largest oil reserves, has been deprived of access to international financial aid and foreign direct investments (FDI) in its oil industry - due to crippling sanctions.

As confirmed in RT’s report, the citizens of Venezuela are suffering from one of the worst economic crises in the nation’s history. Extreme levels of hyperinflation, which have now exceeded 10,000,000% this year, have forced many Venezuelans to resort to desperate measures.

Cryptocurrencies Are Too Technical For Most Venezuelan Residents

As CryptoGlobe reported on May 10, 2019, Alejandro Machado, the co-founder of the Open Money Initiative (OMI), a project dedicated to researching how money is used in “collapsing monetary systems,” had revealed that the majority of Venezuelans had not completely abandoned the Bolivar, the nation’s national currency.

While the Bolivar may have become worthless due to hyperinflation, Machado said that most people in Venezuela were still using the Bolivar because they had to, in order “to survive.”

While Machado acknowledged that bitcoin's trading volumes in Venezuela had surged to all-time highs, mainly on LocalBitcoins, he pointed out that most of the nation’s residents are not able to use cryptocurrencies due to their highly technical nature.

No Evidence Of Petro Being Used

An extensive report from Reuters revealed last year that there was “no evidence” of the Petro being used, domestically or internationally, to settle transactions.

Cabinet Minister Hugbel Roa claimed in late August 2018: “Nobody has been able to make use of the petro ... nor have any resources been received.” This, as the Petro cryptocurrency was still in its development stages, Roa said.

However, a local crypto trader had explained that it was not practical to use the Petro for daily transactions because “there is no way to link prices or exchange rates to a token that doesn’t trade."