Venezuela is raising the minimum wage by 18 times, pegging it to the national petroleum cryptocurrency, Petro (PTR), by 50%, according to a Bloomberg report on Friday.
President Maduro Nicolas announced a new monthly minimum wage of 126 Venezuelan bolivars ($28). This is an 18-fold increase over the national minimum wage, which will be 50 percent tied to the petro, the government’s cryptocurrency.
“I have proposed setting the basic minimum wage for workers at half Petro, approved!
And that pushes all payrolls up.”
The increase will also apply to social security retirees, and the Venezuelan president confirmed that he has instructed his deputy to implement the wage increase this month.
The Venezuelan national cryptocurrency is based on the “DASH” blockchain and has many characteristics of a CBDC digital currency.
Building the Petro on the DASH blockchain technology and centering it around government issuance, makes it more like a central bank digital currency (CBDC) than a cryptocurrency. Little is known about Petro because the advertised block explorer is inaccessible.
In theory, the Petro can be bought with BTC (Bitcoin) and LTC (Litecoin) from the Venezuelan central bank or local exchanges, but prices vary widely between the central bank rate and the private exchange rate.
According to reports, most Venezuelans use the PTR “Petro” not by choice but out of necessity. For example, pensions are paid in this currency.
It is also illegal for US residents to hold or trade the PTR due to the sanctions imposed by the previous US administration under Donald Trump.
Criticisms of Petro Unlike other centrally issued digital currencies, Petro is pegged to 1 barrel of oil rather than 1 bolivar. This has resulted in the country receiving criticism from other countries as well as from its own people.
The currency here is based on the DASH-based chain, meaning that Petro has little value due to its volatile pegs and undocumented origins.