Petro, the cryptocurrency pet project from Venezuelan President’s Nicolas Maduro, is causing more problems than solving them.
Retail stores in Venezuela are protesting the Petro by refusing to accept it as a payment method. Retailers say that no supplier accepts the “cryptocurrency,” which means vendors must exchange it for the local fiat currency.
Ordinarily this wouldn’t be too much of a problem, but because of Venezuela‘s wild hyperinflation, it’s putting vendors in a tight spot.
The Bank of Venezuela rolls the conversion rate from Petro to fiat back to when a good was bought. As a result of hyperinflation, the value of that good rapidly increases, vendors have reportedly found it difficult to reliably replenish stock.
Josefina Salvatierra, executive director at the National Council of Commerce and Services (Consecomercio), said this could leave retailers unable to replenish their inventory as they simply don’t have the cash. “The Petro is a scam for the merchant,” Salvatierra said. With continued hyperinflation and the time delay to liquidate Petros for fiat, it appears to be doing little to nothing to allay the country’s economic challenges.