The Vice-President of Venezuela, Delcy Rodriguez, announced last Friday that passport issuance fees can only be paid in the government-created cryptocurrency Petro as of November 1, 2018. Furthermore, the cost has increased to 7,200 ($115.77) bolivars to obtain a passport this Monday.
In November, this will translate to two petros for a new passport and one petro for an extension. The new payment method was part of a joint announcement, which also revealed that the country has established a migration police force, which will tend to the 72 ports of entry. The creation of the force comes at a time of mass emigration from Venezuela due to its deep economic crisis.
The use of cryptocurrency is the latest effort by Venezuela to combat the side-effects of inflation and a struggling economy by using cryptocurrencies to circumvent capital controls. However, according to a report from Bloomberg, the raised passport fees are four times that of the average monthly minimum wage in the country.
Latin American newspaper El Universal sighted Rodriguez as saying: “in the case of Venezuelans who are abroad, until the first day of November the cost will be $200 for issuance and $100 for extensions.”
Controversy Surrounding Petro
The cryptocurrency petro is backed by five billion barrels of petroleum which the government says is located in an isolated savanna in the center of the country, Atapirire. Launched in February, the petro is not sold on any major crypto exchange nor are any shops known to accept it.
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Socialist President Nicolas Maduro has stated that the cryptocurrency would be the cornerstone of the country’s recovery plan. However, a report by Reuters found that it is not a “functional financial instrument.”
Furthermore, the core developer of Ethereum Joey Zhou pointed out in a Tweet posted last week that petro has allegedly plagiarised parts of its whitepaper from the GitHub repository of Dash. All of this raises real questions on the viability of the digital asset being able to do any meaningful work in helping the country get back on its feet.
Venezuela’s Mass Emigration
Since the beginning of this year Venezuela’s currency, the Venezuelan Bolívar, has fallen by more than 99 percent. In stark contrast, the opposition-led Congress estimates that the annual inflation is 200,000 percent.
It appears that the raising of the passport fees is an attempt to stop locals from fleeing the country. According to the United Nations, around 2.6 million Venezuelans have fled the country, with most of them heading to other South American countries. From that figure, about 1.9 million have left since 2015, under Maduro’s governance.
However, Maduro disputes these figures – claiming they have been dramatized to make him look bad. Instead, he insists that 600,000 or less have left in two years and from those, 90 percent regret doing so.