Venezuela’s national cryptocurrency Petro will cease to operate from January 15, 2024. Launched in 2018 by Venezuelan President Nicolas Maduro, this oil-backed asset was intended to protect the country from the economic consequences of US sanctions.
Unwinding of Venezuela’s Petro State Crypto
It’s yet another disappointment for the Venezuelan authorities in their quest for financial freedom. Venezuela’s national cryptocurrency, Petro, will soon cease to function, according to the press citing government sources. The news was confirmed by CryptoLand Venezuela a platform dedicated to crypto education in the Spanish-speaking world.
From January 15, the Patria on which the Petro crypto was accessible, will block all Petro wallets. Petro users whose wallets are blocked need not worry. Their Petro holdings will be paid out in Bolivar, the country’s national currency.
The Petro crypto had been launched in 2018 by Venezuelan President Nicolas Maduro. At a time when the country was in the grip of US sanctions, Nicolas Maduro hoped that this cryptocurrency backed by the country’s abundant oil reserves would constitute “a new form of international financing for the country’s economic and social development”.
Petro failure: low adoption and corruption in Venezuela
In a country where the national currency is hit by high inflation, a state-backed private cryptocurrency had a chance of succeeding. Yet the Petro has failed to establish itself in the lives of Venezuelans. Adoption of this state-owned cryptocurrency remained marginal in the country, and its use was limited to transactions with the state.
Moreover, the Petro crypto has recently been at the center of a vast corruption scandal. In May 2023, billions of dollars were embezzled from Petroleos de Venezuela (PDVSA), the country’s national oil company. This embezzlement was made possible by the manipulation of the Petro crypto. The affair caused such a stir that Oil Minister Tareck El Aissami ended up resigning. This scandal has clearly put an end to the Petro crypto, which was already struggling to find a place in Venezuelans’ wallets.
It’s true that crypto-currencies can provide a bulwark against inflation or foreign sanctions. However, not all cryptocurrencies are of this nature. If there’s one piece of advice for the Venezuelan authorities, it’s to bet on the right horse and stop financial malpractice. In this respect, El Salvador is a very good example.
I dream of a world where every citizen has total control over themselves, including their finances. I believe that Bitcoin is one of the tools that will achieve this revolution. Since 2019, I am learning about this cryptocurrency and spreading the word around.
