The president of Venezuela, Nicolas Maduro, has reportedly ordered banks in the South American country to adopt the oil-backed state cryptocurrency, the petro, as a unit of account, according to Agence France-Presse.

Per a resolution passed by Sudeban, Venezuela’s banking sector regulator, financial institutions in the country will now be required to ensure that their financial information is reflected in the petro cryptocurrency besides the bolivar, the country’s fiat currency.

At a time when Venezuela is grappling with skyrocketing inflation and empty store shelves, the adoption of the petro cryptocurrency as a unit of account is part of Maduro’s plans to ease the worsening economic crisis. After experiencing an economic recession and sky-high inflation for the last half a decade, the International Monetary Fund has projected that the inflation rate in Venezuela will hit a figure of 1,000,000% this year.

So far it is estimated that over 2 million people out of a population of over 30 million have fled the country to escape the economic crisis.

Bolivar Soberano

Launched earlier this year with the aim of accessing international financing and circumventing sanctions slapped on Venezuela by the United States, the petro has elicited as much controversy on the world stage as the enthusiasm it has received from the Venezuelan socialist government.

As CCN.com recently reported, a re-denomination exercise was undertaken in Venezuela with the country’s ‘new’ fiat currency now pegged to the petro which is said to be backed by Venezuela’s oil and mineral resources. The re-denomination exercise resulted in the Bolivar getting devalued by 95% and renamed the Bolivar Soberano or the ‘Sovereign Bolivar’.

These economic changes also saw Banco Central de Venezuela, the central bank of Venezuela, unveil an Android app meant to assist the residents and citizens to convert the country’s outgoing fiat currency to the new one pegged to the petro. The app was touted by Banco Central de Venezuela as a necessary tool to help the citizens in understanding and assimilating the monetary re-denomination process being carried out in the country.

Pumping the Petro?

Though it is over half a year old, the most significant developments regarding the petro besides its launch have only happened recently. Mid this month, for instance, Maduro announced that the Petro would become the official currency of Petróleos de Venezuela, S.A. (PDVSA), the state-owned oil and gas corporation.

“As of next Monday, Venezuela will have a second accounting unit based on the price, the value of the petro,” said Maduro in a televised address. “It will be a second accounting unit of the Republic and will begin operations as a mandatory accounting unit of our PDVSA oil industry.”

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