The government of Venezuela is now forcibly converting the pensions of its senior citizens into the Petro cryptocurrency.
The chief hallmark of cryptocurrency is that it puts economic choices in the hands of the individual. This is done by cutting out the middleman in the form of banks and other centralized institutions. However, this feature requires that virtual currencies remain decentralized. Such is not the case in Venezuela where cryptocurrency is being turned on its head by the central government.
Government of Venezuela Taking Control
The elderly in Venezuela recently got a nasty surprise, courtesy of the administration of President Nicolás Maduro. They had been receiving pension payments via the carnet de la patria system for some time. This portal is run by the government and not by the traditional banking system.
The basic working of the carnet de la patria system is that the elderly received their pensions in their account with the portal. They would then transfer the bolivars from the account to their bank account, at which point they would then have to go to the bank and attempt to withdraw the physical fiat.
This system has made the portal (patria.org.ve) the number five website in the country. The sites that beat it? Google, YouTube, Banesco (a bank), and Facebook.
The nasty surprise is that those waiting for their pension payments in December got an email message with the description of “Saving in petro.” The email messages took the following form:
MOTHERLAND WALLET: CREDIT for an amount of Bs.S. 1,800.00 for the concept of Elderly Love Pensions (Third month Christmas bonus 2018) on 12/07/2018
MOTHERLAND WALLET: DEBIT for an amount of Bs.S. 1,800.00 for the concept of Savings in Petro on 12/07/2018
What this means is that the government decided to convert the pension payments into the Petro cryptocurrency. This was done without any prior notice or the consent of the people receiving the pensions.
Senior citizens who get a pension now have to navigate through the carnet de la patria system and find the process that allows them to convert the Petro into bolivars and then send the fiat to a local bank. (This is necessary as you can’t use the Petro for anything currently.) Needless to say, the site does everything possible make this as hard as it can be.
Compounding the issue is that people who had not signed up to be part of the carnet de la patria system found their pensions converted. This means that they have to create an account and deal with the official government website in order to access the funds they’re entitled to.
Centralizing cryptocurrency just allows a despotic government to fully control the monetary decisions a citizen can make. With just the flip of a switch, Venezuela could stop all access to controlled accounts, thus leaving the average person high and dry without any means to procure funds.
The socialist policies of President Nicolás Maduro, following in the footsteps of Chavez, continues to bring misery to the country’s populace. Basic food items, medicine, and fuel are almost impossible to get. Inflation is so rampant that the government literally lopped off five zeroes from the bolivar. In 2017 alone, the average Venezuelan lost 19 pounds due to the dire economic situation and lack of foodstuffs.
Do you fear centralization of cryptocurrencies? Let us know in the comments below.
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