Things are only getting weirder in Venezuela, as President Nicolas Maduro decides that one state-issued cryptocurrency farce isn’t enough. Now, the socialist country with a crumbling economy is ready to launch second Petro token — called Petro Gold.
Maduro’s Vision
Earlier this week, collapsing socialist country Venezuela purportedly launched Petro — the world’s first state-issued cryptocurrency — purportedly backed by the country’s oil reserves. The problem is, the oil allegedly backing each token has yet to be drilled, and the country is currently in the throes of an extreme economic crisis.
Of course, Maduro had already deemed Petro a massive success from the moment it launched — if not before. By his own estimations, the President’s prized cryptocurrency has raised $735 million in the first day of a pre-sale.
Riding high on his self-deemed success, Maduro has decided to issue another state-backed cryptocurrency, called “Petro Gold.” In a televised speech, the socialist leader stated:
Next week I‘m going to launch the Petro Gold, backed by Gold, which is even more powerful, that will strengthen the Petro.
As the name implies, Petro Gold will purportedly be backed by the country’s gold supply. Whether or not the precious metal has actually been excavated from the ground, however, remains to be seen.
Reasonable Doubt
Most experts interpret Maduro’s new found love for state-issued cryptocurrencies as little more than an attempt to circumvent U.S. financial sanctions as Venezuela buckles under hyperinflation and a collapsing socialist economy currently unable to provide enough food for its citizens.
In fact, U.S. investors may even be getting themselves into legal trouble should they invest in Petro or Petro Gold, as the U.S. Treasury Department has already claimed that Venezuela’s cryptocurrency potentially violates international sanctions.
Venezuelan opposition leaders are unsurprisingly calling Maduro’s oil-and-gold-backed cryptocurrencies illegal debt issues, while informed investors are left with far more questions than answers.
One such investor, Sean Walsh — founder of crypto-asset investment firm Redwood City Ventures — thinks Petro Gold is speculative at best, telling Reuters:
Rather than buying a cryptocurrency backed by gold, I’d just go buy the gold. Gold is a physical thing that you want to be able to hold in your hands, because that’s the point.
The South American country has a long history of uncompensated expropriations, and its fiat currency has depreciated upwards of 99 percent. Those facts shouldn’t exactly inspire investor confidence.
Others claim that supporting Venezuela’s cryptocurrency projects in any way is akin to financially supporting both the regime’s crackdown on human rights and inability to govern.
The Venezuelan government has also repeatedly proved itself to be against the very foundations of blockchain technology and cryptocurrency, by remaining incredibly opaque and safeguarding what many countries would consider public information.
What do you think of Petro and Petro Gold? Would you even consider investing in either cryptocurrency? Let us know in the comments below!
Images courtesy of Shutterstock, Bitcoinist archives
