Last week, the Socialists United-led basket case nation of Venezuela rolled out their cryptocurrency called the Petro. Supposedly it raised a few hundred million dollars. Though no one can be entirely sure. President Nicolas Maduro is the source of the claim that his government’s conversion into crypto raked in a cool $735 million. This from a man who once said the ghost of late president Hugo Chavez came to him in the form of a little bird. True or not, what we know is that the Petro is the first ever cryptocurrency issued by a nation state.
One Petro was priced at the market rate of oil, meaning that the initial coin offering of the Venezuelan government was out of reach for most locals. The average Venezuelan is struggling to buy food, according to Human Rights Watch, and millions more have fled in the last couple of years alone.
With its national currency, the Bolivar, basically worthless, the Venezuelan government has asked state-controlled enterprises like oil major PdVSA to start accepting some payment in Petro. Considering the fact that PdVSA is the government, PdVSA is basically accepting payment from itself. Unless a PdVSA customer wants to buy Petro coins and pay for oil that way, then it is unsure what value this has other than acting like a new form of sovereign bond issue. New Venezuelan sovereign bond issues are sanctioned by the U.S. government. But new cryptocurrencies, of course, are not.
Let’s see if it helps Venezuela avoid default and make its late payments on PdVSA bonds.
Read more at: