Despite all the criticism, the presale of Venezuela’s native cryptocurrency, the Petro, is going well. Most recently, the vice president of the state Tareck El Aissami reported that private companies could purchase Petro via Dicom.
Despite all the criticism, the presale of Venezuela’s native cryptocurrency, the Petro, is going well. Most recently, the vice president of the state Tareck El Aissami reported that private companies could purchase Petro via Dicom. For the uninitiated, Dicom is a Venezuelan foreign exchange.
Dicom serves as the main tool for the government to auction foreign currencies. When it was launched in May 2017 one USD was traded for 2.200 bolivars. Just a month later, the rate increased to 2.640 bolivars. Rumor has it Dicom was temporarily taken down in September because there wasn’t enough supply of foreign currency. Once reopened, traders could purchase one USD for the staggering 3.345 bolivars. However, the inflation is so brutal that current rates dwarf those from 2017. While on Dicom one USD is traded for 25.000 bolivars on the black market the prices are near ten times higher – 228.000 bolivars for a single USD.
In order to use Dicom, one may register only if they have a foreign currency account in a bank, licensed to operate in Venezuela. As of now, 580.000 users trade via Dicom.
But why is that important? Because once listed on Dicom, Petro could be used by private companies to pay with it, whenever they import raw materials. During a television broadcast, the vice president said, “The Petro is going to be our powerful international currency, above the dollar.” He did not fail to invite local banks to invest in Petro while it is still available at a lower price. We have to note that during the presale which ends on March 20, the Petro is at a discount. Tareck El Aissami reminded the public that Petro can be purchased with foreign currency only. It is expected that bolivars would be accepted at a later stage. Furthermore, banks within Venezuela do hold Petro as an asset.
It is no secret that Petro is the only way for Venezuela to bypass US sanctions and thus find its way out of the recession. President Maduro claimed that on the first day of the presale Petro secured some $735 million. At the same time, the opposition deems the cryptocurrency illegal and unconstitutional.
Nevertheless, Maduro believes in his token and even ordered airlines and state-owned companies to accept Petro as a payment method. This way he hopes to bolster adoption. Despite that the opposition bashes Petro, the Chinese credit heavyweight Dagong, has faith in the currency, stating it may help the global economy.