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.

Shark Attacks Pomp: Holding 50% of Your Net Worth in Bitcoin Is ‘Insane’

On Tuesday (August 6), Kevin O'Leary (aka "Mr. Wonderful"), one of the "sharks'" (i.e. venture capital investors) on American reality TV series "Shark Tank", attacked Bitcoin bull Anthony Pompliano (aka "Pomp"), Co-Founder and Partner at Morgan Creek Digital Assets, over the latter's claim that he was holding 50% of his net worth in Bitcoin.

O'Leary and Pompliano were appearing as guests on CNBC's pre-market morning news and talk program "Squawk Box", which was being co-hosted by Melissa Lee and Andrew Ross Sorkin.

Lee started the segment titled "Markets in Turmoil" by asking Pompliano how much longer the narrative of Bitcoin as a safe haven asset would continue.

Pompliano replied:

Institutions have spent decades looking for non-correlated assets they can use as a diversification of portfolio. We've been banging the drum for over a year now saying that this is a non-correlated asymmetric asset. If you look at times of global instability like in May, where we are kind of lobbing tariff threats and the trade wars are raging on, bitcoin is up 55%. It's got a negative correlation, so it's -0.9 to S&P negative -0.8 to gold. I think we're going to continue to see that play out.

Lee then asked Pompliano if some of the price rise in Bitcoin that we saw over the past couple of days was due to the threat of a currency war between the U.S. and China, and Sorkin asked him if the price rise was caused by Chinese investors buying Bitcoin as a hedge or by other investors buying Bitcoin (and thereby pushing the price up) based on their thinking that there will be "outflows from China."

Pompliano said that he thought that it was probably a combination of the two.

A bit later on, O'Leary, who admitted to being a cryptocurrency skeptic, asked Pompliano why his small test portfolio of $100 worth of crypto he had purchased over two years ago as part of a night class at Harvard Business School was now only worth $30.62. O'Leary said that most of this unrealized loss was due to the poor performance of the altcoins he had bought.

He then asked Pompliano this question:

If this is really such a great idea, why is there really only one Vegas game working?

Pomp said that he was there to talk about Bitcoin and Bitcoin was the only cryptocurrency worth buying. 

When O'Leary asked Pomp how much he had invested in Bitcoin, Pomp answered that 50% of his net worth is in Bitcoin.

This made O'Leary very angry:

I forbid that! That's insane! That breaches everything about diversification in investing... I teach this stuff... 50%? Shame on you! That's nuts!