Venezuela’s Controversial Petro Cryptocurrency Is Now Officially on Sale

John Vibes
  • After many delays, the Venezuelan government's controversial fiat cryptocurrency, the Petro, is finally on sale.
  • However, the currency may struggle to find market share among so many trusted and decentralized alternatives.

After many delays, the struggling Venezuelan government has finally begun selling its fiat cryptocurrency, the Petro. Last month, Venezuelan officials issued a statement announcing that the currency was listed on some of the world's largest exchanges, but the listing was nowhere to be found, and the government was silent about the project until the new round of announcements this week.

According to Venezuela’s vice president of the economy, Tareck El Aissami, the Petro can now be purchased directly from the Superintendency of Cryptoassets and Related Activities (Sunacrip). However, the launch is already off to a rocky start, as the official wallets have been removed from the Google app store, and are no longer available through the Petro website. So far, most of the support for the Petro has come from local politicians, some of whom were photographed purchasing Petro at Sunacrip’s headquarters.

After the purchases, the politicians were given certificates of ownership and answered questions for reporters.

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Petro Backing

The government of Venezuela insists that the Petro will be backed by oil, which if true, could prevent the government from excessively printing money and devaluing the currency, a policy which has generated the current economic crisis in the country.

Petro’s recently released whitepaper specifies that the currency is backed by a portfolio of gold oil and diamond. It is important to note that the public has lost significant trust in the Venezuelan government and its central bank as a result of the hyperinflation crisis, and the sloppy roll-out of the Petro. Moreover, many Venezuelan citizens have already become comfortable using more trusted and decentralized cryptocurrencies such as bitcoin (BTC), bitcoin Cash (BCH), and dash (DASH).

Ironically enough, Ethereum developer Joey Zhou pointed out last month that the whitepaper for the Petro seems in fact to be a “blatant Dash clone.”

Venezuelan president Nicolas Maduro claims that all oil purchases in and out of the country will be paid in Petro, which could be where the most popular use case for this blockchain if it is rejected by the citizens. Venezuela is one of the world’s top exporters of oil, so if they were able to require foreign buyers to trade with them in Petro, it has the potential to turn the crypto into a valuable asset; For now however, it seems that this is a risk not many seem willing to take.

Cuba to Study the Use of Cryptocurrency to Boost Economy

Neil Dennis

Cuba's communist government has said it is studying the potential use of cryptocurrency to help prop up its ailing economy.

Hit by falling exports, a sharp decline in financial aid from its closest ally Venezuela and a tightening by President Donald Trump of the decades-old sanctions against the island state, Cuba is looking at alternatives to boost its economy.

Speaking on state-run television on the night of July 2, President Miguel Diaz-Canel said his government was looking into the use of cryptocurrency. 

To what extent these plans would be formed was unclear. However, he said the plan would help raise capital for nearly one-quarter of the island's population, and help pay for reforms.

Venezuela's Folly into Crypto

Last year close ally Venezuela - also hit by US sanctions and hyperinflation - launched its own cryptocurrency called the Petro, backed by the country's oil reserves. The country's economists believed that by pegging the oil-backed Petro to the bolivar the almost worthless sovereign currency could be stabilized.

The Petro, however, has largely failed to gain traction and is not being used as an alternative currency according to a report by Thomson Reuters and is difficult to find on any cryptocurrency exchange - even the six that initially said they would list it.

Tanya Abrosimova, cryptocurrency analyst at FXStreet, said:

The problem with Petro boils down to the fact that it is controlled by the government that has already discredited itself. The cost of the digital coin does not fluctuate freely based on supply and demand; it is controlled by the government instead. If Cuba manages to avoid making the same mistakes, its cryptocurrency may have a positive economic effect.

More Study Needed

Appearing on the state TV with the President Cuba's economic minister Alejandro Gil Fernandez said:

We are going to study the application of the cryptocurrency in national and international commercial relations. It does not mean that we have a Cuban cryptocurrency on Monday, but here we have to study everything.

It was suggested, however, that among the first measures to be implemented would be salary increases for public service workers - whether or not the introduction of cryptocurrency trade would help fund this was not discussed.

Nor did Diaz-Canel or Fernandez elaborate on whether Cuba would attempt - like Venezuela - to create its own "national" cryptocurrency, or if the country would implement measures using pre-existing digital assets.