Venezuela’s president, Nicolas Maduro, recently announced that he plans to revive the country’s oil-backed cryptocurrency Petro, which failed to attract users.
Venezuela’s Petro: National cryptocurrency that failed
The last several years have brought great economic difficulties for the country of Venezuela, whose native currency, bolivar, suffered a great loss of value due to extreme inflation. At the same time, cryptocurrencies were finally leaving the shadows and becoming a big trend around the world. This is why the country decided to create its own, national cryptocurrency backed by its oil supplies — Petro.
The coin was supposed to represent a safe haven from the nearly-worthless bolivar, but also to help circumvent US sanctions. However, Petro, which was launched in 2018, failed to attract users as Venezuelans were more interested in Bitcoin and altcoins. Now, Maduro has announced that he plans to bring the Petro back.
Maduro’s plan to revive Petro
This Tuesday, President Maduro published a decree, stating that airlines flying from Caracas are now obligated to pay for Venezuela’s fuel via Petro. He said,
I decree the sale of all fuel sold by the PDVSA for planes operating international routes be made in petros from now on.
Further, he ordered that the coin must be more widely used throughout the country.
The fact that the US banned the use of Petro and marked it a scam also did not help the coin’s popularity.
Another one of Maduro’s decrees states that the coin must also be used for paying for state document services, such as passports. So far, even Venezuelans avoided Petro as much as possible as many do not even know how to use it. As for foreigners, the coin is not only banned by the US, but it was also labeled as a scam by numerous risk rating websites.
Still, Venezuelans have shown that they are open to the idea of cryptocurrency by using trusted, decentralized coins to battle hyperinflation.
Maduro is Determined to Make Petro a Success
In mid-May 2019, Bitcoinist reported that Venezuela attempted to discuss mutual trades in Petro with Russia. With both countries having issues with the US, they were discussing methods of eliminating the use of the USD in their trade deals.
Then, last December, Maduro also approved bonuses for public employees and pensioners, but he insisted that they will be paid in Petros. According to experts, it was not long before the coins were exchanged for bolivars, which were then used to purchase other currencies. This is why the country’s government recently blocked the possibility of exchanging Petros for bolivars.
So far, Maduro’s decree regarding fuel payment lacks details, and it remains unknown whether the measures he introduced only concern Venezuelan firms, or international carriers, as well. It is worth mentioning that international links to the country have been weak due to restrictions ever since the country’s economic crisis began seven years earlier.
With that said, the country capital’s Maiquetia Airport is still serviced by multiple companies, including Iberia, Panama’s Copa Airlines, Portugal’s TAP, Air France, and Air Europa. Even so, Venezuela does not offer direct flights to the US as a consequence of sanctions.
Do you think that Petro has any chance of coming back, or that the forced revival will fail? Tell us what you think in the comments below.
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