Monday, 8 April 2019

The Venezuelan Petro.

In February 2018, the government of Venezuela - well known for its financial acumen - announced they were jumping on a digital bandwagon by launching their own cryptocurrency the Petro. The new currency had many stated aims, including to bolster the crashing Venezualan Bolivar currency, and to circumvent US sanctions.

This was an interesting move. The  initial sale allegedly raised $3.3 billion for the Maduro government, although there has been no independent verification of that claim.

I personally feel that government-backed cryptocurrencies are a good way forward for the technology. Although governmental backing reduces some of the advantages of such systems, it also gives a currency increased trust - and trust has been one thing holding cryptocurrencies back.

It is therefore interesting that Venezuela, a country that is in the depths of a massive financial and political crisis, is the first country to make such a move. So what has happened in the last year?

The answer appears to be 'not much'. You cannot go onto a market and buy a Petro or Petro Gold. No-one seems to have an idea about the value of a Petro. To make matters worse, the technology behind the Petro has changed several times of the year, even after launch - and there are even doubts that the currency even exists in any practical form.

I won't go into any jokes about the failure of a socialist state to create a reliable currency - after all, we capitalist countries haven't been brilliant at that, either. But the Petro does seem to be yet another scam cryptocurrency - albeit one created by a government that is in real trouble.

And meanwhile ordinary Venezuelans suffer.

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