Calling el Petro, “the simplest, easiest, and safest way to send money…(and) the only way to avoid depreciation of income,” Venezuelan politicians are now using their equally controversial national cryptocurrency to make a grab at profits gleaned from the country’s substantial remittance market, Miami New Times reports.
With more than 4 million Venezuelans now forced to live abroad due to chronic decline back home, remittances to Venezuela have become big business.
In 2017, the Venezuelan remittance market was worth $1.5 billion, but revenues are expected to top $4 billion this year, New Times writes.
As hyperinflation and consequences of mismanagement mount, Venezuelans are expected to be withdrawing another $4.5 billion USD from foreign accounts.
If those monies are withdrawn, says Miami New Times, revenues from remittances would eclipse oil revenues in Venezuela, and the Maduro government would like to up its share:
“Maduro and his acolytes have clung to power thanks to a cocktail of rackets, such as illegal gold mining and drug trafficking, combined with spending cuts on food imports and skimming money off the top of aid sent home from Venezuelans abroad. Rent-seeking by the Maduro regime ranges from the elaborate — attempts to tax wire and cryptocurrency transfers — to simple acts such as demanding bribes or charging hefty tariffs on food and medicine packages entering the country.”
Conceived as a way for Venezuela to assert autonomy in global markets, the concept of “El Petro” was first introduced by the Maduro regime in December 2017, but the platform was not launched until February of this year.
The Maduro government has been working to push the citizenry onto the system. Pensioners were recently forced to take part of their pensions in El Petro, despite the fact that the crypto was not yet usable.
Venezuela has also been trying to limit citizen’s use of other cryptocurrencies, New Times reports:
“The Venezuelan government has also attempted to crack down on peer-to-peer cryptocurrency exchanges that don’t trade the Petro or refuse to share user data, but to middling effect. Hundreds of thousands of Venezuelans continue to send money in and out of the country in the form of better-known cryptocurrencies such as Bitcoin and Litecoin, and without government interference. In effect, the recent attempts to popularize the Petro and the state-run remittance platform seem to be little more than Maduro trying to get a bigger cut of remittances.”
Autonomy is the idea, but kleptocracy is the reality, says José Colina, president of Veppex, a Miami-based advocacy organization “politically persecuted Venezuelans in exile”:
“First, the government generates a crisis in Venezuela, and then it looks to profit from the suffering of Venezuelans desperate for money from family abroad…I think it’s shameless.”