Venezuela’s Cryptocurrency Petro is of No Use

Nishanth Shetty

September 3, 2018 1:38 pm

Cryptocurrency News

Venezuela's Cryptocurrency Petro is of No Use
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The Petro cryptocurrency has been under a lot of debate in the cryptocurrency community. Several people have said that its a successful example of using the technology to create resource-backed assets. Others call it a scam by the government which has already created issues with high-inflation against its citizens. A new report describes the actual cause-effect.

Nobody is using Petro

According to the research by the Reuters, the currency has no users, investors or any recoverable resources which could back-up the currency. The Maduro government is unable to explain about the development process.

Venezuela’s President Nicolás Maduro says that petro has already secured $3.3 billion and is being used to pay for imports. A cabinet minister uncovered that coin isn’t ready for prime time yet. Mr. Hugbel Roa, who supervises the government’s Venezuelan Blockchain Observatory, told the Reuters that the coin is still in the development stage and nobody can use the petro and that it hasn’t received any resources. He said that customers have only made ‘reservations’ for petro; however, it isn’t released.

The Petro is pegged to the rate of one barrel of Venezuelan oil, and it is deemed to be supported by oil reserve in a 380-square-kilometer bloc known as Ayacucho I. The government asserts to keep 5.3 billion barrels. Whether the claim is valid or not, significant investment in infrastructure will be needed to develop the remote area to get any oil it may keep, and the Venezuelan government is in no position to deliver on that in its present state.

Reporters who visited the town of Atapirire, located in the bloc, and found abandoned old oil pumps, crumbling roads, hungry kids, and power outage complaints from the residents. Rafael Ramirez, the former oil minister who served under President Hugo Chavez for ten years, now lives in exile. Lately, it was estimated that it would cost around $20 billion to get the promised oil reserves.

Rafael Ramírez said, “The petro is being set at an arbitrary value, which only exists in the government’s imagination.”

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