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.

U.S. Treasury Committed to Monitoring Facebook's Cryptocurrency Libra

The U.S. Department of the Treasury is set to monitor Facebook’s proposed cryptocurrency Libra to weed out potential risks for the global economy.

According to an announcement published by Emanuel Cleaver, II, a congressman for Missouri’s fifth district, the Department of the Treasury confirmed there are various “unanswered questions” when it comes to Libra, and Congress is set to continue to examine them and “closely monitor this market to address any regulatory gaps that it identifies.

The Libra initiative is led by Facebook, but the currency itself is set to be governed by the Libra Association, an organization whose founding members include Uber, Spotify, Lyft, and Coinbase. This, after financial services giants like Visa, Mastercard, and PayPal left it.

The cryptocurrency is set to be backed by a basket of fiat currencies, comprised of the U.S. dollar and short-term U.S. Treasury bonds (50%), the Japanese yen (14%), the euro (18%), the British pound (11%) and the Singapore dollar (7%).

Cleaver’s announcement came after he received a letter from Treasury after writing to the Financial Stability Oversight Council (FSOC), and the Office of Financial Research (OFR) back in August, calling on the regulators to examine both Libra and Calibra, a Facebook subsidiary that’s a founding member of the Association.

In the letter, the Treasury wrote:

It is unclear whether U.S. and foreign regulators will have the ability to monitor the Libra market and require corrective action, if necessary. This concern must be addressed if the Libra is to launch.”

While Cleaver applauded Facebook’s efforts to work with regulators regarding Libra, with Zuckerberg going as far as saying the social media giant will drop pout of the project if it isn’t approved by regulators, he said it’s “absolutely critical” the project is properly examined to ensure it “does not pose a systemic risk to the global economy.”

According to a report by the BBC, members of the Libra Association haven’t yet contributed funds to the project, after enduring an exodus in support over the past month that saw some of its founders – including PayPal, Visa, Mastercard, and eBay – abandon the project.

Testifying before the House of Representatives Financial Services Committee, Zuckerberg recently said he isn’t sure the cryptocurrency project is going to work.

Featured image via Pixabay.