The objective is to start the operations, on a trial basis, of the Digital Bank announced in 2018. The wallets will be assigned to young people registered in a youth care program

The President of Venezuela, Nicolás Maduro, approved a plan to create one million cryptocurrency wallets for young Venezuelans registered in a youth social program. The announcement was broadcast on radio and television nationwide on Wednesday, June 19th, 2019.

The plan was approved within the framework of the celebration of the second anniversary of “Chamba Juvenil”, a social program created to insert young people into productive activities. During the event, where members of the Executive branch and a group of young people participated, it was announced that these cryptocurrency wallets would mark the start of operations, on a trial basis, of the Digital Bank for Youths and Students.

It should be noted that the creation of this entity was announced by Maduro in early May 2018, with an allocated budget of 20 million Petros, the government’s digital currency. At that time, the amount was equivalent to US $1.2 billion. Since then there had been no new announcements about the project, until the one made on Wednesday.

Youth and Sports Minister, Pedro Infante, informed during the event that the creation of the digital wallets is aimed to incorporate the largest number of young Venezuelans into the cryptoeconomy. “This million young people that will open their wallet accounts will join the ecosystem of the Digital Bank for Youths,” he said.

Infante did not explain the procedure for creating the cryptocurrency wallets; thus, certain details were not clear, such as whether young people will control their own private keys. According to studies on the operation of the Petro platform, it is evident that the wallets do not offer users control over their private keys. However, Infante said that this plan includes the participation of the National Superintendence of Crypto Assets and Related Activities (SUNACRIP), institution in charge of coordinating the activities of this sector in Venezuela.

Maduro also approved a financing of 924 million bolivars, equivalent to US $148,124.39 according to the official rate, to initiate exchanges through the Digital Bank. According to the Vice President of the economic sector, Tareck El Aisami, the young beneficiaries will be able to operate and exchange Petros with any of the existing cryptocurrencies in the ecosystem. Until now, the Petro can be purchased only with Bitcoin, Litecoin and Dash, as indicated on its official website. However, the official did not clarify whether the Digital Bank will expand the exchange options regarding the government’s digital currency.

Maduro exhorted the young people present, as well as the representatives of the public banking system, to engage in the development of the cryptocurrency sector in Venezuela. He said that the crypto asset will be a formula to avoid international financial sanctions applied against the country.

On the other hand, Maduro asked the members of the Executive branch concerned with the financial sector to create a special Petro plan that contemplates the use of said currency in credit plans for young people, as well as the acquisition of goods and services. It is a Special Petro Plan for Youths, for the diverse use of cryptocurrencies in young Venezuelan’s daily economic and commercial lives, as well as for the financing of young people’s projects,” said Maduro.

Petro, which was created in 2017 as a government crypto asset, has generated adverse comments, especially due to the scarce information on its operation.

Late last year, few exchange houses were willing to incorporate this digital currency into their wallets and their acceptance was minimal. In response, the Executive branch has sought ways to encourage adoption, such as the payment of bonuses with petros, but there is no evidence of significant use in Venezuelans’ daily lives.

By Willmen Blanco

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