Venezuela Orders Banks to Adopt Cryptocurrency

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Venezuela Orders Banks to Adopt Cryptocurrency

People queue to withdraw cash from ATM at a Mercantil bank branch in Caracas, Venezuela

Venezuelan President Nicolas Maduro ordered banks to adopt the Petro cryptocurrency as a unit of account Monday, as the country struggles to emerge from a severe political and economic crisis.

Public and private banks must now reflect all financial information in bolivars and Petros, according to a resolution of the Sudeban banking regulator.

The move is part of Maduro's desperate attempts to steer out of five years of recession and inflation the International Monetary Fund predicts will reach one million percent this year. More than two million people have fled the country in the wake of the crisis.

Venezuela has also drastically devalued the bolivar currency, issued banknotes stripped of five zeroes in new "sovereign bolivars."

The economic plan also includes a 3,400 percent increase in the minimum wage and a hike in gasoline taxes, which for years have been the world's cheapest.

The socialist president, elected for another six-year term in May elections rejected by much of the international community as fraudulent, has fixed the currency to the country's widely-discredited cryptocurrency, the petro, which is in turn linked to the price of a barrel of Venezuelan oil (about $60).

The value-added tax, or VAT, is also climbing from 12 percent to 16 percent.

Maduro separately launched an offer of bonds backed by small gold bullion, he said would promote savings among Venezuelans, who see the local currency evaporating with hyperinflation.

"No one can say that gold loses its value," Maduro said on state TV, while showing two cards with the central bank emblem's and some golden rectangles that he called "lingoticos" (little ingots).

The emission, backed in pieces of 1.5 and 2.5 grams (0.05 and 0.09 ounces) of gold, will begin September 11.

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