The first national cryptocurrency in the world remains a mirage as a special report of Reuters unravels the failure that has trailed the cryptocurrency since its supposed official launching on the 20th of August.
The Venezuela National Cryptocurrency, Petro
Petro, the first national cryptocurrency in the world was adopted officially on the 20th of August. The announcement of President Nicolas Maduro raised expectations on the cryptocurrency.
The goal of the cryptocurrency as described by the Nicolas is to serve as a means to salvage the economy of the country from hyperinflation and economic sanctions.
The cryptocurrency is backed by the 5 billion barrels of petroleum yet untapped in Atapirire, a poverty-ridden suburb in Venezuela.
Maduro stated ahead of the cryptocurrency launch on the 20th of August that the national currency, Bolivar would be pegged against the cryptocurrency, inclusive of salary and pension.
The Illusion Of The Petro Cryptocurrency
Petro cryptocurrency since its official launch on the 20th of August has been a shadow of the description accorded it by Maduro. Coupled with the circumstances that surround the ICO, and the oil well, the cryptocurrency is backed with.
In recent research by Reuters on the progress of the cryptocurrency has shown that the region oil backed region is poverty impoverished. Not only that, the facility to tap the resources is not even available yet. A former Oil Minister of Venezuela, Rafael Ramirez, stated that tapping the oil reserve would cost the government $20 billion, which is far from the reach of the government presently. He further indicates that “the Petro is being set at an arbitrary value, which only exists in the government’s imagination.”
On the ICO offering which the Maduro earlier claimed raked in a sum of $3.3 billion and is already in use for import, a member of his cabinet, Hugbel Roa stated that “nobody has been able to make use of the Petro … nor have any resources been received.”
Commenting on the Petro ICO, Tom Robinson, chief data officer and co-founder of Elliptic, a London-based blockchain data company said that “We have found no evidence that anyone has been issued a petro, nor of it being actively traded on any exchange.”
Meanwhile, holders of the cryptocurrency are scarce as most do not want to reveal their identity and some in possession of it feel scammed.
The Petro Error And Opposition
A Venezuelan cryptocurrency expert, Alejandro Machado stated that “There is no way to link prices or exchange rates to a token that doesn’t trade, precisely because there is no way to know what it sells for.”
The sanction placed on the crypto by the President of United States has made the crypto not to be listed on any major exchange. This has created a debacle to its image.
Even the superintendence of Cryptoassets, the government agency that ought to regulate Petro is presently non-functional.
Many cryptocurrency experts and economists have predicted the failure of the Petro. Likewise, the IMF is predicting inflation to rise to 1 million percent in the country soon.
Nevertheless, what should we call the seeming failure of Petro? Is it the economic sanctions or the improper planning of the President?
Iran is also considering towing the path of national cryptocurrency, as more countries are expected to adopt it to salvage their economy from sanctions.