Venezuela’s ‘Petro’ Cryptocurrency Woes

Venezuela’s ‘Petro’ Cryptocurrency Woes Continue, President Nicolas Maduro Vows to Revive it

Venezuela’s president, Nicolas Maduro, announces his plans for reviving the economy of the country and his oil-backed cryptocurrency dubbed Petro.

Maduro used his annual speech to the ruling Constituent Assembly to decree that airlines flying from Caracas Airport must pay for fuel in Venezuela’s ailing “petro” cryptocurrency.

He was quoted saying:

“I decree the sale of all fuel sold by the PDVSA for planes operating international routes be made in petros from now on.”

To buy fuel using the petro cryptocurrency, airlines will likely make use of “Petrocard” which can convert international currencies into the virtual token.

Maduro also directed the compulsory use of the national coin to pay for public document services such as passports.

Backed by the South American nation’s massive oil reserves, the petro token was launched in 2018 as a way to evade widespread US sanctions and resolve long-lasting liquidity shortages.

Maduro hopes the cryptocurrency can become a broadly used means of payment across the country, yet the majority of Venezuelans aren’t familiar with how the virtual currency work.

In his speech, Maduro did not stipulate in detail if the newly introduced fuel payment would apply to Venezuelan corporations alone or if they extended to international carriers.

Petro Fails To Win Investors Confidence

The last couple of years have brought grievous economic difficulties for Venezuela, whose native currency, bolivar, experienced crippling devaluation due to heavy inflation.

The petro virtual currency was thus introduced to represent a safe haven from the nearly-worthless native currency, but also to dodge severe US sanctions. Unfortunately, the Venezuela’s crypto failed to attract significant users as nationalists have been more interested in BTC and other altcoins.

In fact, Maduro recently approved bonuses for public employees and pensioners but insisted they should be paid in Petro.

The coins were later exchanged for bolivars and used to purchase other currencies. The country then banned the possibility of exchanging petro for bolivars.

The Venezuela’s Crypto Described as a Scam

Risk rating websites such as icoindex.com describe the petro as a “scam.” The coin was also banned by the US, which dubbed it a rip-off.

In an attempt to raise the popularity of the national cryptocurrency, Venezuela attempted to discuss trades in Petro with Russia as both countries had issues with the US The two countries discussed methods of getting rid of the use of USD in their trade deals.

Maduro’s decree regarding fuel petro payments seems to be yet another attempt for the regime to legitimize and revive the failing crypto.

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